SOURCE: NextStudent

August 30, 2007 09:05 ET

Student Loan Borrowers Have One More Day to Apply to Take Advantage of Interest Rate Discounts With NextStudent

PHOENIX, AZ--(Marketwire - August 30, 2007) - Students and parents considering federal student loans for their college and graduate school financing needs can get substantial interest rate discounts by applying for their student loans through NextStudent, a leading Phoenix-based education funding company.

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 Student Loan Consolidation, these rate reduction benefits could lower a borrower's monthly student loan payments by up to 60%.

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

Currently before Congress, the College Cost Reduction Act of 2007 will not affect NextStudent's current borrowers. However, with the funding cuts contained in the legislation -- including the elimination of $19 billion in government support for student loans -- NextStudent may no longer be able to offer its rate reduction benefits to borrowers whose student loans are funded after a final bill is passed and takes effect. If Congress passes this bill as expected, other private lenders like NextStudent may also be forced to eliminate the discounts they currently offer on federal student loans.

With the bill expected to take effect October 1, 2007, it is highly unlikely that borrowers who apply for a federal student loan with NextStudent after August 31, 2007, will have their student loans funded in time to take advantage of the current NextStudent discount benefits.

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

* 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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