As forecast in my April 15 column, student loan rates will increase dramatically on July 1. Based on the May auction of Treasury bills, rates on Stafford Loans for those in school, in grace or in deferment will jump to 6.54 percent a year from 4.7 percent. Stafford Loans already in repayment will jump to 7.14 percent from 5.3 percent. And rates on PLUS loans (for parents) will jump to 7.94 percent from 6.1 percent.

Let me put my advice in bold type: If you have a student loan and have not consolidated and locked in current low rates, you must do it now -- today. This advice applies to graduates and current students, even though you may take out other loans in the future.

In order to lock in the current lower rates, you must have a "substantially completed" loan consolidation application on file by midnight, June 30.

When you consolidate your loan, the rate will be a weighted average of your existing loans. Current students could potentially lock in a consolidation rate as low as 4.75 percent, compared with a rate of 6.625 percent after July 1. Older loans might result in a higher consolidated rate.

A special note for student borrowers who are still in school: This will be the last opportunity to consolidate existing loans while you're in school. Changes in the law mean that all future consolidations must be done after graduation.

QUESTIONS AND ANSWERS

Where do I consolidate? If you have only one lender, you must consolidate with that lender. If you have loans from different lenders, you can consolidate with any lender approved by the Department of Education.

uHow do I compare? By law, all lenders and consolidators must charge the same rate, and may not charge additional fees. But many lenders do offer additional special deals.

For example, Sallie Mae, a private company that is the largest lender and consolidator, will shave one-quarter of a percent off your loan rate if you agree to have your monthly payments directly debited from your checking account. Many other lenders offer this same deal.

And many lenders offer a full percentage point drop in your interest rate after you've paid your loan on time for 36 months. You'll want to find a lender that offers these benefits.

uIs there anything to watch out for? Yes, you need to watch out for several key points when choosing a place to consolidate your loan.