Consolidating Loans

General Information

A Direct Consolidation Loan allows you (or your parent, if they have a PLUS Loan) to combine multiple eligible federal student loans into a single loan with one monthly payment. Depending on the repayment plan you choose, your monthly payment may be lower than under the 10-year Standard Repayment Plan. The interest rate on a Direct Consolidation Loan is the weighted average of the interest rates on the loans being consolidated, rounded up to the nearest one-eighth of one percent. Consolidation does not generally lower your interest rate.

Eligible federal student loans, including Direct Loans, Direct PLUS Loans, and most Federal Perkins Loans, may be consolidated into a Direct Consolidation Loan. Loans that are still in an in-school status are not eligible for consolidation. To apply for a Direct Consolidation Loan or learn more, visit studentAid.gov/loan-consolidation(opens in new window).

How Do I Know if Consolidation Will help Me?

You will be given more information about consolidation loans during required entrance and exit counseling sessions.

As a general rule, once made, consolidation loans cannot be reversed because the loans that were consolidated have been paid off and no longer exist. Take time to study your consolidation options carefully before you apply, and talk to the holder of your loans for more information before you consolidate.

Before applying, review the potential advantages and disadvantages of consolidation. While consolidation can simplify repayment and may provide access to additional repayment and forgiveness options, it may also increase the total amount of interest paid over the life of your loan and may cause you to lose certain borrower benefits associated with your original loans.

How Does Default Affect Consolidation?

If you are in default on a federal student loan, you may still be eligible for a Direct Consolidation Loan if you meet certain eligibility requirements. Visit studentaid.gov for current eligibility requirements and application information.