Current Balance: $28,638     

In the past few months the Fed has continued to raise borrowing rates. Because of this increase, lenders have slowly been increasing their rates as well. Mortgage interest rates, personal loan interest rates and, you guessed it, student loan interest rates have steadily been increasing. According to the chart above from the U.S. Department of Education, student loan interest rates have been rising the last two years. Yikes! Not good news for new borrowers.

What does this mean for you? 

If you have already consolidated your student loans with a fixed interest rate or you are happy with your current interest rates, you don’t need to do anything. However, if you have a variable interest rate or have been looking to consolidate your student loan debt, now may be an opportune time to do so. 

Why is it a good time?

If you have a variable interest rate, it is extremely likely your rate is going to increase because the Fed has indicated they are going to continue to increase rates. If you are thinking about consolidating, now is also a good time to look at the current rates and see what works for you. As I stated above, variable interest rates are going to increase, so I’d focus on the fixed interest rates to avoid the risk of an increasing variable interest rate and the resulting increase in payment. A fixed payment is better for your budget. You may have a higher interest rate starting out but you don’t have to worry about it increasing every time the Fed increase the borrowing rate.