Can someone remind me how this works? I understood it once when I consolidated my loans a couple of years ago, but I can't remember how the consolidation rate is determined. I remember when I consolidated that it was pretty certain the rate was going to drop, so I waited until they did to consolidate. My wife is graduating, and we're not sure if we should do it now or wait until the rate changes...

Thanks in advance for any help.

After filing out forms most of the morning:

Your rate is determined based on the wieghted average of your outstanding student loans, and the T-bill rates from the summer auction.

In my case, My loans prior to July 1, 1998 came in at 4.22%, while those after July 1, 1998 come in at 3.42% Since I borrowed a lot more money during undergrad, my base rate, prior to incentives (on time, automatic, etc) is slightly over 4%. Rates are likely to increases this July, but not by much.

Hope that helps and isn't wrong.

BTW, want to look at what you owe?
Goto www.nslds.ed.gov, get a pin if you don't have it, and you should be able to get basic info on all your loans

Danbobtx

With two weeks to go, it's already at 1.078. The last 5 auctions do not make for a very promising trend:

Term	Issue		Maturity	Discount	Investment
	Date		Date		Rate %		Rate %	
			
91-DAY	4/15/2004	7/15/2004	0.915		0.929
91-DAY	4/22/2004	7/22/2004	0.935		0.949
91-DAY	4/29/2004	7/29/2004	0.97		0.985
91-DAY	5/6/2004	8/5/2004	0.985		1.001
91-DAY	5/13/2004	8/12/2004	1.06		1.078

No, that's not a good sign at all.

On a different subject: any idea how one could invest to take advantage of this trend (other than investing an afternoon in filing for a consolidation)? This is all a new universe to me.

-A