Federal Student Loan Question

[Skyblade]

I have a federal direct loan with a variable interest rate. I keep hearing about ways people can reduce their interest rates and since my direct federal loan has a variable interest rate, the interest goes up every year. Currently my interest rate looks like its 7.22% (which seems pretty high to me). I do get a 0.25% interest discount for paying online automatically (so its essentially 6.97%). However, July 1 my interest rate is set to go up AGAIN. I wanted to make sure I put my money in the best situation possible and I don’t know anything about student loans. I currently owe about $10,000. Are there better options for me or is this the best I can get?

I have no problem making the payments so lowering my monthly payment isn’t something I need and since I finished paying off the car I thought about putting that money towards the student loan from now on (making more than just the minimum payment). As far as I understand it does look like my interest rate can go as high as 8.25% and never higher than that (according to the direct loan website).

[awhitmer83]

When I finished grad school, I took out a consolidation loan that's fixed at 2.3% (of course this was a few years ago when interest rates were better). I would be seriously angry if I had to deal with a variable rate. Federal loans are capped, though, so 8.25% should be the highest it can go. I'm not sure if you could consolidate a single loan - couldn't tell from your post if you had just one - but it might be worth looking into. Just make sure you're talking to reputable lenders; a friend of mine took a private loan and the interest has skyrocketed to 15%.