Daughter has 4 years of Stafford loans - 2 years are subsidized and the 1st 2 years were not. Should she begin to look now to consolidate at today's rates or is it better to wait until after graduation (and the possible rate increase)? She will be going to grad school in Sept, so after consolidating, she will be looking to defer them again (unless we decide to pay them for her). Thanks!

Consolidate sometime between the time her last disbursement comes through (probably this month) and the time she graduates. This is an 'in-school' consolidation and I think must be done with the original lender of the loans, assuming they are all the same. This means that the interest rate of the consolidated loan is based on the in-school rate rather than the out of school rate, which saves about 0.5% or so.

Thank you for the reply - we have been getting tons of "misinformation". Called her servicer today with a bit more understanding (after reading the boards!) - seems she has to consolidate through them since her loans are all through Fleet/BOA. They quoted a rate of 4.7 for in school consolidation and 5.3 for after graduation. They have a .5 reduction for auto debit payments and a rate reduction of 1% for on time payments of 36 months. They also said that if she puts the loan in deferment in Sept when she starts grad school, she will not lose her rate or perks. Does this sound right? Thanks for all the great posts!

That sounds right to me. I would be sure to do the consolidation before she graduates; make the application as soon as she gets her last disbursement.

And congrats to your daughter on her impending graduation!