Delete if you are an international student or a domestic student not
interested in Federal financial aid.
_________________________________________________________________________
The interest rates on Federal education loans are variable and change on
July 1, based on the 91-day T-Bill rate from the last Treasury auction in
May plus a statutory percentage add-on (1.7% in-school, 2.3% in repayment).
That auction was on May 29, 2001, with a rate of 3.688%, which rounds to
3.69%. According to the formula, the new applicable interest rates are as
follows effective July 1:

                  In-School Rate  Repayment Rate
Direct Loans        5.39%           5.99%

Thus, interest rates have dropped by 2.2% and are lower than they have been
in many years. Students who have not yet consolidated their federal loans
should consider consolidating after July 1 in order to lock in these low
rates, even (especially) if they are still in school. Consolidation is an
optional process wherein the rate is a weighted average interest rate of
the loans being consolidated, rounded up to the nearest 1/8th of one
percent.  This interest rate becomes fixed for the life of the consolidated
loan.

According to Mark Kantrowitz, publisher of FinAid.com, "a student with
$16,000 in debt who consolidates at 6.0% (5.99% rounded up to the nearest
1/8th of a point) will save $2,233.52 over the lifetime of the loan
compared with consolidating at 8.25% (8.19% rounded up to the nearest 1/8th
of a point). If the student consolidates while still in school to take
advantage of the in-school rate, the rate used will be 5.5% (5.39% rounded
up to the nearest 1/8th of a point), and will yield an additional savings
of $478.93 for a total savings $2,712.45 over the lifetime of the loan.

"Caveat: It is possible that the Fed will continue to cut interest rates
and that this will continue to be reflected in auction results, so that
next May the rates will be even lower. But there is also the risk that the
Fed rate cuts will end, and that the rates next May will be higher. Given
that the current rates are the lowest in many years and the savings already
substantial, the safest course of action is to consolidate after July 1,
2001 and before June 30, 2002."

However, if you are planning to consolidate I would suggest doing so before
September 30, 2001 to take advantage of an additional 0.8% interest rate
reduction.  Refer to the first attached Word file for details on this and
the consolidation process.

*It is not too late to apply for 2001-2002 federal student loans*
If you are a U.S. citizen or permanent resident and are interested in
borrowing a 5.39% Direct Loan, you may still apply by following the
instructions in the second attached Word file.

This may seem complicated to you, but the attachments really do answer your
questions, so please read them thoroughly before e-mailing me.

Regards-
debi

 - Loan Consolidation Eve June 2001.doc
 - 2001 haas fafsa guide eve.doc


_____________________________
debi fidler
Director of Financial Aid for MBA Programs
Haas School of Business, S420C
University of California, Berkeley
Berkeley, CA  94720-1900
voice (510) 643-1680
fax (510) 643-6659