College Loan Consolidation
College Loan Consolidation
You can consolidate (combine) multiple federal student loans with various repayment schedules into one loan: either a FFEL Consolidation Loan or a Direct Consolidation Loan, making a single monthly payment to consolidate student loan.
[ad]With a consolidation loan:
• Your monthly payment might be lower.
• You can take a longer time to repay (up to 30 years).
• You will receive a fixed interest rate on your Direct
or FFEL Consolidation Loan.
School Loan consolidation occurs when you combine one or more eligible loans into one loan as either a FFEL Consolidation Loan or a Direct Consolidation Loan resulting in one monthly payment. 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 (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) or debt counselors for more information before you consolidate.
Your parents can also get a Direct or FFEL PLUS Consolidation Loan if they have obtained a PLUS Loan for you. PLUS Loans can only be consolidated once the loans have been fully disbursed. If you’re in default on a federal student loan, you still might be able to consolidate, provided the defaulted loan is not subject to a judgment or wage garnishment.
What kinds of loans can be consolidated?
All federal student loans are eligible for consolidation of debt, 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).
If you’re applying for:
• FFEL Consolidation Loan—Contact your lender or the agent servicing your loan(s).
• Direct Consolidation Loan—Contact the Loan Origination Center’s Consolidation Department at 1-800-557-7392. TTY users may call 1-800-557-7395. Or, go to www.loanconsolidation.ed.gov. When can I consolidate my loans? For both FFEL and Direct Loans you can consolidate:
• During your grace period.
• Once you’ve entered repayment.
• During periods of deferment or forbearance.
• While you’re in school. However, you must be attending at least half-time.* (Caution: with FFEL Consolidation Loans, if the original loans were never in repayment, it is the lender’s option to grant the consolidation.) Direct Consolidation Loans only:
• You must have at least one Direct OR FFEL Stafford Loan. Generally, your loan is in an in-school period if you have been continuously enrolled at least half-time* since the loan was disbursed.
• If the school you’re attending does not participate in the Direct Loan Program, at least one of the loans you consider for College Loan Consolidation must be a Direct Loan.