Lock in Loan Rates Now, Experts Advise

Financial experts are advising students and parents to secure loans for upcoming college tuition now, before loan rates go up.

Congress is expected to pass a debt reduction bill that will allow rates on educational loans to rise later this year. The higher rates are expected to come into effect on July 1, 2006.

Students beginning college in fall 2006 are urged to apply for scholarships and loans now. The budgets they draw up for their first year in college should take into account any possibility that tuition rates might increase before they matriculate. They should also be realistic in budgeting for items like textbooks and dorm fees.

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This is good and timely advice. Even small differences in loan rates will make an enormous difference in the total amount of debt you wind up having to repay.