Federal Student Loan Consolidation

Federal Student Loan Consolidation is an option for borrowers after they leave school.  Consolidation isn’t mandatory – it best suits borrowers with multiple servicers, those who have a combination of both FFEL and Direct Loans, and for those who want to extend repayment up to 30 years.

Consolidation combines original federal student loan debt into one new loan with a fixed interest rate (based on the weighted average interest rate of the loans that are being consolidated). 

Consolidation is a process that can’t be reversed, so before electing this option, ask yourself the following questions:

  1. Are your monthly payments manageable?  If not, consolidation increases the repayment period to up to 30 years, which could lower the monthly payment (but could increase the grand total amount paid).
  2. Do you have multiple servicers and payments?  If so, a consolidation loan results in a single servicer and a single monthly payment.
  3. Do you hope to take advantage of Public Service Loan Forgiveness (PSLF)?  Only Federal Direct Loans (including the Federal Direct Consolidation Loan) are eligible.  Federal Perkins, Stafford, and FFEL Graduate PLUS Loans can be consolidated into an eligible Federal Direct Consolidation Loan.

If you elect to consolidate, apply online at https://studentloans.gov