Consolidating Federal Parent Loans May Be a No-Brainer: Tips to Consider When Deciding to Consolidate Federal PLUS and GradPLUS Loans -- SimpleTuition Gives Students and Parents an Objective View into Student Loan Options

For the majority of students and parents who have Federal Parent PLUS or GradPLUS loans, consolidating now would immediately lower the interest rate - and depending on borrower benefits - could also allow for additional interest rate reductions and other incentives.

BOSTON (BusinessWire EON) February 13, 2007 -- For the majority of students and parents who have Federal Parent PLUS or GradPLUS loans, consolidating now would immediately lower the interest rate – and depending on borrower benefits – could also allow for additional interest rate reductions and other incentives.

Combining multiple loans into one consolidation loan may enable borrowers to lower their monthly payment, lower the total cost of their loan, access better incentives and/or streamline the monthly management of their student loan payments

Most new Parent PLUS and GradPLUS loans carry a fixed interest rate of 8.50%. Once these loans go into repayment – usually occurring 45 days after the final disbursement of funds (for most people that’s the second semester payment, which many just recently paid) – Parent PLUS and GradPLUS loans are eligible for consolidation. With consolidation loans carrying a fixed rate that cannot exceed 8.25%, borrowers can immediately lower their base rate from 8.50% to 8.25%, ultimately lowering monthly costs and saving hundreds over the life of the loan. Additionally, many lenders offer aggressive “borrower benefits,” incentives that can further lower borrowing costs by significant amounts.

There are exceptions to this “no-brainer” deal. Most notably, borrowers with Parent PLUS or GradPLUS loans through the Direct Loan program might already have a low fixed rate. But for most borrowers, consolidating PLUS loans can result in an immediate savings. To help navigate this often confusing process, SimpleTuition, Inc. (www.SimpleTuition.com), a company dedicated to helping students and parents make sense of education financing choices, offers an objective resource that helps parents and students evaluate, analyze and compare loan options.

SimpleTuition has a few recommendations for borrowers wanting to consolidate:

• Carefully evaluate the types of loans before consolidating; in some cases, consolidation is not the best option
• Weigh the relative value of “borrower benefits,” as each lender may have different benefits and these can significantly change the monthly payment or total amount owed
• Pay close attention to the requirements for qualifying for borrower benefits. Make sure you remember to meet these requirements
• Don’t assume you won’t save by consolidating a Direct PLUS Loan, even though they typically already have lower rates
• Private and Federal loans should not be consolidated together, as Federal loans have much lower interest rates.

“Combining multiple loans into one consolidation loan may enable borrowers to lower their monthly payment, lower the total cost of their loan, access better incentives and/or streamline the monthly management of their student loan payments,” said Kevin Walker, CEO of SimpleTuition, Inc. “However, the best course of action is not always clear to borrowers. There are a plethora of options, but to really know the right choice for one’s personal financial situation, borrowers would have to spend hours reviewing literature and crunching numbers. SimpleTuition eliminates this cumbersome process. Parents and students can simply visit our intuitive web site and provide current outstanding balances and interest rates – the site will display multiple consolidation options for their review.”

With SimpleTuition, parents and students can quickly compare loans by simply entering the estimated amount needed and answering a few non-personal questions. The company offers over 50 loan products for all education loan types, including private, PLUS, Stafford, GradPLUS, federal consolidation loans and private consolidation from more than 25 lenders. Results can be sorted by monthly payment, total cost of loan, number of payments, first payment due date and APR. With direct links to the financial institution’s online application, the entire process can be completed online or via a toll free call. To ensure the objectivity and accuracy SimpleTuition is not a lender.

About SimpleTuition, Inc.

Founded in 2005, SimpleTuition is dedicated to helping students and parents make sense of education financing options. Recently featured as one of Fast Company’s Top 12 Web 2.0 sites, SimpleTuition is the only company to offer an independent and objective solution for researching and comparing private, PLUS, Stafford, GradPLUS, federal consolidationand private consolidation loans. SimpleTuition is headquartered in Boston, Massachusetts and is funded by Atlas Venture, IDG Ventures Boston and North Hill Ventures. For more information visit www.SimpleTuition.com.