The interest rate on most federal student loans - such as the Stafford for students and PLUS for parents - is 3.37 percent. But on July 1, that rate jumps to 5.26 percent, according to David Feitz, associate executive director at the Utah Higher Education Assistance Authority.

"Now is the time to consolidate," Feitz said. "It's better to lock in the fixed pre-July rate."

One caveat about merging the loans: It's permanent, meaning borrowers lose out on lower rates in the future.

Still, locking in a lower interest rate is a good thing, especially for medical students, said Nathan Gilmore, who just finished his second year at the University of Utah School of Medicine.

While declining to disclose his own student loan tab, Gilmore did say that on average a student will have amassed about $50,000 in debt midway through medical school.

"After four years, a medical student could have close to $100,000 in student loans," said the 27-year-old Gilmore, who is married. He and his wife, Meagan, are expecting their first child.

Scott Jones also plans to nail down the current 3.37 interest rate.

On May 6, the Montana native collected his master of business administration degree from the University of Utah. He also has several federal loans, totaling more than $16,000.

The 27-year-old Jones, who now has completed his college education, has six months before he is required to start repaying the loans. But that grace period will vanish for students who consolidate loans while still in school.

Loss of that grace period concerns Gilmore, who notes that many medical students cringe at the prospect of entering residency with huge debt.

"You either will be able to make your payments or, if you can't, you go into hardship," Gilmore said.

The amount of debt influences the medical practice budding doctors choose to pursue, he added.

"I want to make good money - not be in public health or a rural area and making $40,000 to $50,000 a year," he said. "You can't pay anything off that way."

Unlike medical students, the average Utah undergraduate carries about $14,000 in federal loans, said Feitz, noting the national figure is about $20,000.

Student loan rates are determined the last Monday in May, when U.S. Treasury bills are auctioned. Those rates now are going in one direction - and that's up, Feitz said.

"The rates in effect right now are the lowest in the history of the student loan program," he said. "It's a once-in-a-lifetime opportunity."

Jones, the newly minted MBA graduate, calls student loans a "double-edge sword." He suggests the low-interest rates actually contribute to the high cost of college because the money is easily obtained and the federal government guarantees repayment.

"Ten years ago," Jones said, "I could have paid my tuition out of pocket."

sykes@sltrib.com

To find out more

Students who want to know whether loan consolidation is right for them can call the Utah Higher Education Assistance Authority at 877-336-7378. The application must be received no later than June 30.