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Education Loan Consolidation

Education Loan Consolidation is the process for combining multiple eligible student loans into a new simplified repayment; one monthly payment with one single lender.

Federal Direct Consolidation

The Federal Direct Consolidation Loan is a loan that combines all a student's federal borrowing history into a new loan with one monthly loan payment. Consolidation loans are available for most federal loans, including FFELP (Stafford, PLUS and SLS), FISL, Perkins, Health Professional Student Loans, NSL, HEAL, Guaranteed Student Loans and Direct loans.

Advantages of Loan Consolidation

  • By combining the loans, borrowers have one payment to make each month.
  • Manageable monthly payments. If borrower has trouble making standard monthly payment, consolidation can assist in lower current monthly payments.
  • Creates a fixed interest rate
  • Flexible repayment options.
  • Extends repayment up to 30 years.
  • Federal Direct Consolidation Loan allows highly indebted borrowers with limited income to take advantage of the new Income-Based Repayment Plan (IBR) and the Public Service Loan Forgiveness program. Visit www.studentaid.gov for more information.

Disadvantages of Loan Consolidation

  • Increases the repayment of the loan and thereby increases the total amount you have to repay.
  • Loss of borrower benefits.
  • May cause loss of grace or deferment period.

More Information about Federal Loan Consolidation

The Department of Education has an extensive website for Federal Direct Consolidation Loans. Please visit https://studentaid.ed.gov/sa/repay-loans/consolidation. Specific questions and information can also be obtained by calling 1-800-557-7392 [TDD 1-800-557-7395].

Alternative/Private Loan Consolidation

There are some lenders that offer alternative/private loan consolidation. However, you should not consolidate the alternative/private loans with your federal loans. Consolidating federal loans outside Direct Loan Consolidation will result in the loss of federal loan interest and repayment terms. Interested borrowers should contact a lender of their choice to request consolidation information.