Loan Consolidation

What is loan consolidation?

Loan consolidation is combining one or more eligible federal educational loans into a single new loan.

What are the benefits of a Direct Consolidation Loan?

There are many benefits a Direct Consolidation Loan can offer you:

  • Reduced monthly payments -- A consolidation loan may ease the strain on a borrower's budget by lowering the borrower's overall monthly payment. The minimum monthly payment on a consolidation loan may be lower than the combined payments charged on a borrower's federal education loans.
  • Flexible repayment options -- Borrowers can choose from four different plans to repay their consolidation loan(s), designed to be flexible to meet the different and changing needs of borrowers. Borrowers can switch repayment plans at anytime.
  • No minimum or maximum loan amounts or fees --There is no minimum amount required to qualify for a Direct Consolidation Loan. In addition, consolidation is free.
  • One lender and one monthly payment --With only one lender and one monthly bill, it is easier than ever for borrowers to manage their debt. Borrowers have one lender, the U.S. Department of Education, for all loans included in the Direct Consolidation Loan.
  • Varied deferment options --Borrowers with consolidation loans may qualify for renewed deferment benefits.
  • Retention of subsidy benefits --There are two (2) possible portions to a consolidation loan: Subsidized and Unsubsidized. Borrowers retain their subsidy benefits on loans that are consolidated into the subsidized portion of a consolidation loan.

Am I eligible?

Here are some questions to ask yourself to see whether consolidation is right for you:

  • Are your monthly payments manageable? If you have trouble meeting your monthly payments, have exhausted your deferment and forbearance options, and/or want to avoid default, a Direct Consolidation Loan may help you.
  • Too many monthly payments driving you crazy? If you send payments to more than one lender every month, and want the convenience of a single monthly payment, consolidation may be right for you. With a Direct Consolidation Loan, you will have a single lender – the U.S. Department of Education– and a single monthly payment.
  • What are the interest rates on your loans? If you have variable interest rates on your Federal education loans, you may want to consolidate. The interest rate for a Direct Consolidation Loan is fixed for the life of the loan.
  • How much are you willing to pay over the long term? Like a home mortgage or a car loan, extending the years of repayment increases the total amount you have to repay.
  • How many payments do you have left on your loans? If you are close to paying off your student loans, it may not be worth the effort to consolidate or extend your payments

To find out if you are eligible for a Federal Direct Consolidation Loan, contact:

Direct Consolidation Loan/Borrower Services
Toll free: 1-800-557-7392
Hearing Impaired Borrowers with a TDD: 1-800-557-7395
Online: - Consolidation

View your loan history at the National Student Loan Data System.