Student and parent borrowers can consolidate (combine) multiple
federal student loans with various repayment schedules into one
loan: either a FFEL Consolidation Loan or a Direct Consolidation
Loan. The result is a single monthly payment instead of multiple
monthly payments.
With a consolidation loan:
- Your monthly payment might be lower.
- Your repayment period may be extended (up to 30 years, depending on the amount of your consolidation loan and your other student loan debt).
- You will receive a fixed interest rate on your Direct or FFEL Consolidation Loan.
Compare the cost of repaying your unconsolidated loans with the cost of repaying a consolidation loan. Things to consider are:
- Whether you’ll lose any borrower benefits if you consolidate, such as interest rate discounts or principal* rebates, as these benefits can significantly reduce the cost of repaying your loans.
- Whether you might lose some discharge and cancellation benefits if you include a Perkins Loan in your consolidation loan.
Carefully review your consolidation options before you apply. Talk to the holder of your loan(s) for more information before you consolidate.
If you’re in default* on a federal student loan, you still might be able to consolidate if you make satisfactory repayment arrangements on the defaulted loan or agree to repay the consolidation loan under the Income-Contingent or Income-Sensitive Repayment Plans, provided the defaulted loan is not subject to a judgment or wage garnishment.
All federal student loans discussed in this guide are eligible for consolidation, and others can be included. To get a complete list of your loans that are eligible for consolidation, contact your lender or the agent servicing your loan(s).
For both FFEL and Direct Loans you can consolidate:
- During your grace period.
- Once you’ve entered repayment (the day after the end of the six-month grace period).
- During periods of deferment or forbearance.
- FFEL Consolidation Loan—Contact the consolidation department of a participating lender for an application and more information. You may consolidate your loans with any eligible consolidation lender in the FFEL program.
- Direct Consolidation Loan—Contact the Direct Loan Origination Center’s Consolidation Department at 1-800-557-7392, or go to www.loanconsolidation.ed.gov. TTY users may call 1-800-557-7395.
The interest rate for both Direct and FFEL Consolidation Loans is a fixed rate for the life of the loan. The fixed rate is based on the weighted average of the interest rates on all of the loans you consolidate, rounded up to the nearest one-eighth of 1 percent. The interest rate will never exceed 8.25 percent.
Yes, there could be. For example, consolidation may significantly increase the total cost of repaying your loans. Because you may have a longer period of time to repay, you’ll pay more interest. You might also lose some borrower benefits such as interest discounts and rebates.
NOTE: Once made, consolidation loans cannot be revoked for any reason because the underlying loans that were consolidated have been paid off and no longer exist.
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