What Does It Mean To Consolidate A Federal Loan?

What Loans Can Be Consolidated

Federal Family Education Loans (FFEL) and Direct Loans, including:

  • Stafford
  • PLUS
  • SLS
  • Previous Consolidation Loans
  • Perkins Loans
  • Health Professions Student Loans
  • Nursing Student Loans
  • Health Education Assistance Loans (HEAL)
  • Federally Insured Student Loans (FISL)

*Alternative loans are not eligible to be included in a Federal Consolidation loan

Why should I consolidate?

Pros

  • Consolidation locks the interest rate.
  • Consolidation can allow the borrower to bring together loans from multiple lenders for a single repayment schedule (i.e., one monthly payment).
  • Consolidation may allow the borrower a longer repayment period, which will reduce the amount of the borrower's monthly payment.
  • Consolidation can allow a borrower to resolve an overaward of Stafford loans or resolve a defaulted student loan.

Cons

  • Consolidation locks interest rate, while older Stafford loans have a variable interest rate.
  • Consolidation may increase the total cost of the borrower's loan. The longer the repayment, the more interest the borrower will pay.
  • The borrower may have to forfeit all or a portion of the grace period.
  • The borrower may lose certain borrower benefits with current loans.
  • Certain deferments may be lost; however, borrowers retain their ability to request most major deferments after consolidation.
  • Borrowers who consolidate Perkins Loans lose deferment subsidy and cancellation eligibility.

For Additional Information on Consolidation please visit or call: 
Federal Consolidation Loans (“Repayment and Consolidation”)
(800) 577-7392