Consolidation to Fixate Interest

It's usually a good idea to consolidate student loans as soon as possible at a time when interest rates in the country are on the rise. This is because the interest rate on the consolidated loan becomes fixed, and you continue to pay at lower rates while market rates rise all around you. You can't have consolidation with any federal loan, but there are a number of federal loans that support it. The question is, what should you do about the consolidation of federal loan while still in school?

How Soon is Soon?

Some people used to take the idea of 'as soon as possible' to its logical extreme, and opted for consolidation of their federal loan while they were still in school. It made sense if there was a hike in rates. So if you are still in school, and are benefiting from a federal loan, what should you do about it?

What to Do While Still in School?

Nothing, really. In 2005 there was passed a law called the Deficit Reduction Act, which made it the consolidation of a federal loan while still in school no longer possible. So in a sense, you have missed the boat.
The interest rate on a federal loan varies according to the 91-day Treasury Bill rate, and that began to rise on July 1 2006, so you have passed up on the opportunity for consolidation at the lowest rate, on account of your still being in school. You can now only consolidate when you're in repayment mode, which starts six months after you graduate.
But take heart – there's no saying which way the rates will go. They may be dropping again by the time you graduate. So make the best use possible of this enforced period of non-payment, and set yourself up for consolidation of your federal loan as soon as you're out of school.