Fed-Lowered Interest Rate on Student Loans Brighten Financial Outlook for Many.

Byline: Fred O. Williams

Aug. 30--Canisius grad Jennifer Sicignano didn't know it, but her financial outlook brightened on July 1. That's when interest rates on federal student loans took a steep dive, meaning she'll get a break when she starts making payments on her $7,000 loan in December.

"Hopefully, it might go lower," the economics major from Buffalo said of the interest rate.

Homeowners aren't the only borrowers who can benefit from today's rate environment. Thanks to Alan Greenspan and the Federal Reserve, the time may be right to consolidate federal student loans -- and "PLUS" education loans taken out by parents -- in order to lock in rates that have plunged to record lows under 6 percent, experts say.

Holders of multiple loans or even a single loan, like Sicignano, can take advantage of consolidation to lock in a permanent rate. Eligible for consolidation are both of the two main types of student loans, Direct Loans from the Education Department and Federal Family Education Loans, which are issued by banks. Both are called Stafford loans, but the repayment options can differ from lender …