SOURCE: NextStudent

August 26, 2007 09:00 ET

Borrowers Who Apply to Consolidate With NextStudent by August 31, 2007 Could Lower Student Loan Payments by up to 60%

PHOENIX, AZ--(Marketwire - August 26, 2007) - NextStudent, a leading Phoenix-based education funding company, currently offers its borrowers substantial interest rate discounts on federal education loans, including Stafford, PLUS, Grad PLUS, and Federal Consolidation Loans. For borrowers who consolidate their federal student loans with NextStudent, the NextStudent rate reductions could lower their monthly payments by up to 60%.

But because of pending federal legislation, those discounts may no longer be available to borrowers who apply for a federal education loan from NextStudent after August 31, 2007.*

NextStudent currently rewards borrowers with up to a 2.25% interest rate discount on any Stafford, PLUS, Grad PLUS or Federal Consolidation Loan:

--  An immediate 0.25% rate reduction just for signing up to have loan
    payments automatically deducted from a savings or checking account
--  A 1% rate reduction after 36 on-time payments -- and NextStudent locks
    in this rate reduction for the life of the loan, even if a borrower misses
    a payment later on
--  OR a 2% rate reduction after 48 consecutive on-time payments

On a Federal Consolidation Loan, these rate reduction benefits could lower a borrower's monthly student loan payments by up to 60% -- but NextStudent will not be able to afford to continue offering those benefits if this legislation passes.

The College Cost Reduction Act of 2007 that's currently before Congress would slash $19 billion in government support for education loans. If Congress passes this bill as expected, private lenders like NextStudent may be forced to eliminate the discounts and rate reduction benefits they currently offer on federal education loans. Some lenders may no longer offer federal student loans at all.

The pending legislation will not affect NextStudent's current borrowers. However, with the cuts contained in the College Cost Reduction Act, NextStudent may no longer be able to offer these interest rate reduction benefits on loans that are funded after a final bill is passed and takes effect. With the bill expected to take effect on October 1, it is highly unlikely that borrowers who apply for a federal education loan after August 31, 2007 will have their loans funded in time to take advantage of the current NextStudent discount benefits.

NextStudent urges students, graduates and parents to apply for their federal Stafford, PLUS, Grad PLUS, and Consolidation loans by August 31, 2007, to take advantage of lower monthly payments and lower interest rates, before the new legislation prevents NextStudent from continuing to offer the current discounts.

Borrowers concerned about losing the rate discounts and other benefits private lenders like NextStudent can offer them should contact their Senators and Representatives and urge them to oppose the student loan program cuts contained in the College Cost Reduction Act.

* NextStudent will discontinue the interest rate discount benefit plan described above if Congress enacts the College Cost Reduction Act of 2007 or similar legislation. Provisions within that legislation would change the fee structure and yields for lenders that make federal education loans. It is not known at the time of this printing on which date the new provisions will take effect, nor whether they would be applied to federal education loan applications that had been submitted prior to that date but not yet funded. NextStudent will not offer the interest rate discount benefits described above for those federal education loan applications that are subject to the new provisions. NextStudent will make its best efforts to expeditiously process all federal education loan applications it receives prior to August 31, 2007, but cannot guarantee that any particular application will be processed in time for the interest rate discount benefits to apply.

About NextStudent

NextStudent, Federal Lender Code 834051, is dedicated to helping students and their families find affordable ways to pay for college. NextStudent offers one-on-one education finance counseling and has a portfolio of highly competitive education finance products and services, including a free online scholarship search engine, federally guaranteed parent and student loans, private student loans, both federal and private student loan consolidation programs, and college savings plans.

For more information about NextStudent and its student loan programs, please visit the company's website at

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