Unfortunately, the days of magically vanishing loan rates end soon.

Starting July 1, the Deficit Reduction Act of 2005 will set a fixed rate of 6.8 percent on new Stafford loans, about two percentage points above this past year's lowest rate. Similarly, PLUS loans for parent borrowers will be fixed at 8.5 percent, up from today's 6.1 percent.

But the fixed rates won't apply to outstanding Stafford and PLUS loans. On those loans, rates will continue changing each July 1 with the 91-day Treasury bill yield set the last Thursday in May. The T-bill rate should rise, so consolidate to lock in the lower rate.

Things get tricky if you consolidated last spring to take advantage of bottom-cruising rates and have since taken out new loans. You can consolidate the new loans, but keep the consolidations separate, says Gary Carpenter of the National Institute of Certified College Planners (www.niccp.com).

"If you roll an old consolidation into a new one, you get a blended rate — the lower rate is lost," Carpenter says.

Next fall's freshmen will pay the post-July, fixed rate on Staffords; likewise, PLUS loans for parents of incoming freshmen will carry the new fixed rate. However, parents of currently enrolled students can apply for a PLUS now and consolidate to lock in this year's rate.

After July 1, parents choosing between a PLUS with an 8.5 percent fixed rate and a variable-rate home-equity line of credit should consider the latter. The average rate for equity lines was recently 7.67 percent, and interest is deductible.

With rates fixed on Stafford loans, private loans, which are issued at variable rates, could someday cost less. Sallie Mae (www.salliemae.com), the largest of the student-loan companies, offers private loans at the prime rate — lately 7.5 percent — with no fees for borrowers with good credit history.

No matter what, borrowers should use federal loans first because payments on those loans can be extended, deferred or forgiven in certain cases.

For current undergraduates, the law boosts the maximum you can borrow in each of the first two years of college, phases out origination fees and expands Pell Grants for math and science students. Married couples may no longer consolidate loans taken out separately into a single loan. And, as of July 1, students can no longer consolidate Staffords during school.