Loan Consolidation

Loan consolidation allows you to refinance any or all eligible outstanding federal student loans and create a single new loan with one monthly payment. The new loan will have a fixed interest rate, new terms, and may have an extended repayment period of up to 30 years.

Loan consolidation is not for everyone. Before choosing loan consolidation, be sure to review all your options. If you are unsure, contact the Loan Consolidation Information Call Center at 1-800-557-7392.

Eligibility for Loan Consolidation

To be eligible for loan consolidation, you must agree to the terms and conditions listed on the Application and Promissory Note, which include:

  • You are not enrolled in school, or you are enrolled on a less than half-time basis.
  • You are in the "grace period" or already in repayment on EACH loan you have chosen to consolidate. WARNING: Consolidation during the grace period will forfeit any remaining "grace period" time. You can choose to delay processing until your grace period is over by indicating the number of months to delay processing. 
  • If you are in default, you must either make satisfactory repayment arrangements on the loan with your current loan servicer before you consolidate, or you must agree to repay your new Direct Consolidation with one of the following plans:
    • Income-based repayment plan
    • Pay as you earn repayment plan, or 
    • Income-contingent repayment plan
  • You must agree to notify the lender of any address changes.

Alternatives to Loan Consolidation

Your alternatives depend on what you plan to accomplish by consolidating.

  • Need a lower monthly payment? Call your loan servicer or visit the Federal Student Aid website to see alternative repayment options.
  • Temporarily struggling to keep up with your loan payments? If meeting your monthly payment is difficult, consider deferment or forbearance options that allow eligible borrowers to temporarily postpone or reduce monthly payment.
  • Want to find a different repayment plan? You do not need to consolidate to apply for these options:
    • Standard 
    • Income-based 
    • Pay as you earn 
    • Income-contingent 

Advantages and Considerations

This list of loan consolidation features, along with advantages and considerations for each, can help you decide if consolidation is the right option for you.

  • One loan servicer manages the loan.
    • Advantages: You'll always know whom to contact, and you'll receive only one bill.
  • The average fixed interest rate based on rates from prior loans is rounded up to the nearest 1/8 of 1%.
    • Advantages: Potential for interest savings depending on individual loan interest rates.
    • Considerations: Potential for higher average interest; inability to pay off loans with higher interest.
  • Separate federal student loans are combined into one loan.
    • Advantages: Only one payment to make every month.
    • Considerations: Non-federal loans, such as private alternative loans, cannot be included.
  • You may have an extended repayment period from 10 to 30 years, depending on your total debt.
    • Advantages: Lower monthly payment.
    • Considerations: Potential for much greater interest payments over the life of the loan. 

Loan Information

If you need information on your loans, access the National Student Loan Data System for all federal student aid records (private loans are not listed).

  • Visit the Federal Student Aid website. Your FSA ID will be required.
  • You'll see a listing of your federal student loans with the amounts, dates of origination and outstanding balances.
  • Loan servicer information is available as well.

How to Apply

Visit the Federal Student Aid website or download and mail a Direct Consolidation Loan Application to the appropriate loan servicer.