Federal Student Loan Consolidation

The U.S. government provides loans to students to assist with the cost of higher education and when it comes time to repay them, a federal student loan consolidation may the best choice for those with multiple loans who want to simplify their finances. It is difficult to find loans that are more flexible and offer lower interest rates than federal loans and many students borrow more than one to cover their school expenses. A federal student loan consolidation is a loan that will pay off all of your student loans, leaving you with one monthly payment, to one lender.

Getting behind on loan payments can become problematic quickly so carefully consider all of your long and short-term options regarding repayment of your student loans, including loan consolidation. As always, being well-informed and thorough in your efforts to manage your financial aid is key to a positive overall experience.

Facts to Consider Before Consolidating

  • Review your loan to determine whether you will of lose certain borrower benefits, including discounts, rebates, discharge and cancellation benefits, if you consolidate.  
  • Consider deferment in the short-term, if possible, arranging with your lender to postpone repayment with certain requirements. 
  • Consolidation loans are likely to lower your monthly payment but in the long-term you may increase the total cost of your loan, paying more interest and over a longer period of time, extending the loan to 30 years.
  • Contact your lender to discuss your options carefully before consolidating.

Benefits of Consolidating

  • Lower your monthly payment
  • Make only one monthly payment to one single lender
  • Receive a fixed interest rate on Direct or FFEL Consolidation loans
  • Simplify your bills, minimizing your responsibilities and the potential for being delinquent on your payments

How to Consolidate

Once you have reviewed your loans, considered all of your options, and discussed your situation at length with your lender, and concluded that a federal student loan consolidation is the most optimal financial plan for repaying your debt, you can begin the consolidation process with your lender. 

There are two program options for federal student consolidation loans: FFEL Consolidation Loans and Direct Consolidation Loans.

  • To obtain a FFEL Consolidation Loan contact the consolidation department of your lender for application and other information. 
  • To obtain a Direct Consolidation Loan go to the consolidation department’s website at www.loanconsolidation.ed.gov for further information.

A federal student loan consolidation is an opportunity to simplify your finances while lowering your monthly payments and securing a fixed interest rate.  For many students with multiple loans, this is an attractive option. However, consolidating federal student loans is not necessarily a wise choice for all borrowers, so review and discuss your personal loan information with your lender before deciding to consolidate.