The rate on the popular Stafford Loan for students will increase from the current 5.3 percent to 7.14 percent. PLUS Loans for parents will rise from 6.10 percent to 7.94 percent.

"It's the second-largest rate increase in the history of the student loan program," said David Feitz, associate executive director at the Utah Higher Education Assistance Authority. Student loan rates are determined the last Monday in May, when U.S. Treasury bills are auctioned. Treasury bills now are headed in one direction - and that's up, he added.

Students can save thousands on their loans by locking in at the current rate or applying for a consolidation loan before July 1.

"This is a unique savings opportunity, so borrowers shouldn't procrastinate," Feitz said.

Such advice isn't lost on University of Utah medical student Dan Buck. Combining his undergraduate and first year medical school loans, Buck has $30,000 in student loans. He consolidated most of his loans last year and now is locking in an interest rate on money for medical school.

"You never know what the future will be . . . but I think it will be some time before we see low rates again," said Buck, 32. He and his wife, Timani, have five children and are expecting a baby in August.

The average Utah graduate with a bachelor's degree leaves school with about $20,000 in debt. By locking in at the current 5.3 percent interest rate, the borrower can save more than $5,000 over the life of the loan, but only by acting before the July 1 deadline.

Not wanting students to get caught by surprise by the approaching rate hike, Utah officials in April sent letters to 145,000 students and parents, urging them to lock in lower rates. They also held numerous workshops to help students understand their best options for saving on student loans.

Feitz said his office also offers benefits to borrowers on consolidation loans. A borrower who consolidates student loans may receive a 1 percent interest rate reduction after making 36 on-time monthly payments. Borrowers also may receive an additional 0.50 percent interest rate reduction for automatic-debit payments.

Consolidated loans have a fixed interest rate for the life of the loan.

sykes@sltrib.com

To find out more

Students who want to know how to lock in the current rate or whether loan consolidation is right for them can visit http://www.uheaa.org. They also can learn more by calling Utah Higher Education Assistance Authority's toll-free number at 1-877-336-7378. Applications must be received no later than June 30.