College students and their families are just a week away from seeing their student loan costs jump by hundreds to thousands of dollars. A few months ago, Congress passed a deficit reduction bill that made the biggest cuts in federal student loan program history--$12 billion. Under that bill, as of July 1 interest rates for most loan programs will increase by 1 to 2 percentage points, up to a maximum of 8.5 percent. The money those hikes generate, which come at the expense of low- and middle-income students and working families, will help pay for tax cuts for the wealthy, a fact that seemed not to trouble many in Congress.

July 1 is also the deadline for students and their families to consolidate their loans. After that date, consolidation options become seriously limited for current and future borrowers. Loan consolidation allows students to pay off current loans that may have variable interest rates, and assume one new loan at a lower, fixed rate. AFT members can take advantage of an AFT + benefit program to consolidate their loans. It takes just 10 minutes to fill out the application at http://www.aft.org/aftplus/financial/consolidation.htm.

June, 2006