As you may be aware, the variable interest rate on Federal Stafford student loans is expected to increase significantly this July 1, 2006. Since in-school consolidation is still an option for students, we encourage you to contact your lender immediately to discuss the possibility of consolidating your loans before the rates increase. You may also be aware of other recent changes related to passage of the Deficit Reduction Act that will impact your student loans effective this July 1, 2006.

Some of these changes are:

1. In-school Consolidation will be eliminated.
2. Stafford Loans disbursed on or after July 1, 2006 will take on a fixed interest rate of 6.8%
3. Spousal consolidation is eliminated.

Your lender has all the details about your Stafford loans and can advise you of the steps involved in completing the consolidation process. Be sure to contact your lender immediately if you have questions or are interested in consolidation.

Please be aware of the following key points:

• To qualify for a federal consolidation loan, most lenders require students to have a minimum of $7,500 in federal student loan debt.
• If a student consolidates before the end of his/her grace period, he/she forfeits (waives) the remainder of that grace period and is required to enter into repayment generally within 30 to 60 days. (Contact your lender to discuss other possible options.)
• Only federal loans are eligible for a federal consolidation. Please refer to our online Consolidation brochure for a list of eligible loans.
• If your lender allows an "in-school consolidation", please be sure to also complete the necessary forms for your loans to remain in an "in-school deferment" status.