Consolidation

What is Federal student loan consolidation?

Federal student loan consolidation is a process through which your existing eligible federal student loans can be combined into one new loan called a Federal Direct Consolidation Loan. When you apply for a Federal Direct Consolidation Loan, you are taking out a new loan to pay off all or a portion of your original eligible federal student loans. The Direct Consolidation Loan has a fixed interest rate and a repayment term of up to 30 years — depending on the total amount of your student loan debt.

Which loans are eligible for Federal student loan consolidation?

Federal Stafford Loans, Federal Direct Stafford Loans (subsidized and unsubsidized), Federal Plus Loans, Federal Direct Plus Loans, Perkins Loans, Federal Nursing Loans and Health Professions Loans are eligible for consolidation. You can consolidate all or a portion of your eligible loans. Even if a loan is eligible, you may not want to include it in a consolidation package.

For example: Perkins Loans have a 9 month grace period and cancellation benefits that would be lost if consolidated. Federal Nursing Student Loans and Health Professions Student Loans also have benefits that would be lost if consolidated.

For a complete list of eligible loans, visit the Federal Direct Consolidation Loans Information Center.

Which student loans are not eligible for consolidation?

Private/Alternative loans cannot be included in a Federal Direct Consolidation Loan.  For a complete list of ineligible loans, visit the Federal Direct Consolidation Loans Information Center.

Why should I consolidate my eligible student loans?

Consolidation can provide several benefits including a fixed interest rate for the entire term of repayment, one point of service (meaning one bill each month for all of your federal student loans), as well as a longer term of repayment which can lower your required monthly payment. For more potential benefits, click here.

What are some of the reasons why I may not want to consolidate?

If you select a longer term of repayment, then you may end up paying more interest over the life of the loan. If you consolidate immediately upon graduation, you may forfeit a portion of your grace period since repayment begins immediately after disbursement of the newly consolidated loan. For more information on timing a consolidation application to maximize use of your grace period, view Item 17 of the following instructions: Federal Direct Consolidation Loan Instructions for Application. For an estimate of the size and interest rate of a Federal Direct Consolidation Loan, enter your loans in the Department of Education's consolidation loan calculator.

I have already consolidated, can I consolidate again?

If you have at least one eligible federal student loan that was not included in your previous Federal Consolidation Loan. In other words, you need to have at least one eligible loan that you did not to consolidate in the prior Consolidation Loan, or at least one new eligible federal student loan that you borrowed after the earlier consolidation. In these cases, the prior consolidation loan can be included as one of the loans you are consolidating into the new Federal Direct Consolidation Loan.

NOTE: Combining additional loans will impact your fixed interest rate. Using the Department of Education's consolidation loan calculator can provide you with an estimate of the interest rate on your new consolidation loan before you proceed with consolidation.

Can I consolidate my federal loans with my spouse's federal loans?

No.

What if I am still in school and want to consolidate?

In-school consolidation is no longer available. In order to consolidate you either need to be enrolled for less than 6 credits, or no longer enrolled in school.

Disclaimer: This information is to address student borrower concerns; the Office of Student Financial Assistance & Education can not and will not take a position on this matter. This decision will be strictly between you and your lender.

For more on repayment, see Loan Repayment Calculators.

REMEMBER: It is your responsibility to contact your loan servicers if you have had a change of address. If you have questions regarding your loan repayment, go on-line and check your personal account with your loan servicer.

To find MOST of your Servicers go to https://www.studentclearinghouse.org/secure_area/loan_locator.asp