You may be able to lower your payments through consolidation
The Direct Consolidation Loan Program lets you combine one or more federal student loans into a single new loan. So instead of making several different student loan payments, you make one monthly payment for all your federal student loan(s).
Consolidation may lower your monthly payments and extend your repayment term.
If you have FFEL Program loans you may be able to consolidate in the Direct Consolidation Loan Program. Contact your lender(s). If you don't know who your lender(s) is, go to the National Student Loan Data System (NSLDS), which is the central database for all federal student loan information.
Here are some of the details about the Direct Consolidation Loan Program:
Loans that qualify for consolidation
Almost all federal student loans qualify for consolidation. Some of the more common loans include:
- Stafford loans, both subsidized and unsubsidized
- PLUS loans
- Consolidation loans
- Perkins loans
- Federal Nursing Loans
- Health Education Assistance Loan (HEAL)
- Supplemental Loans for Students (SLS)
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How long you have to pay back your consolidated loan
How long you have to pay back your consolidated loan depends on the amount of the loan and the repayment plan. Contact your lender.
Grace periods and consolidation loans
Consolidation loans do not have six- or nine-month grace periods the way some other loans do—you must begin repayment on a consolidation loan within 60 days of disbursement, regardless of whether the grace periods on the individual loan(s) has ended. This is because once you consolidate your loans into a new consolidation loan, the individual loans cease to exist.
One question you will have to consider if you choose to consolidate is when to do it—before or after the grace periods on your individual loan(s) end. Waiting to consolidate until after that six-month to nine-month grace period allows you to delay repayment.
However, if you consolidate sooner you may be able to lock into a lower, fixed interest rate on your consolidation loan before the variable interest rates on your individual loan(s) start to rise. In that case, consolidating early could help you save money in the long run. Talk to your lender.Back to top
Repayment options for consolidated loans
Consolidated loans feature the same repayment options as other federal loans, ranging between Standard repayment, Extended repayment, Graduated repayment, Income-Sensitive, Income-Contingent, or Income-Based Repayment plans. The repayment period will last 10 to 30 years depending on your student loan debt and the plan you've chosen.
For more information, visit our Repayment options section.Back to top
Things to consider before consolidating
The consolidation program has limitations you should know about before you apply:
- You cannot combine your loan(s) with your spouse's loan(s)
- You must wait until you have stopped or completed your education program
- You must have at least one eligible federal student loan to consolidate
- You cannot combine private and federal student loans
- You may have too low of a loan balance
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Disadvantages to consolidating your loan(s)
Consolidation can be a good repayment option, but it's not for everyone. Your new consolidation loan may have a longer repayment period than remained on your individual loan(s).
Here are some disadvantages to consolidating your loans:
- Your repayment period could stretch up to 30 years, which means more interest would accrue over the life of the loan
- The overall cost of repaying your consolidation loans could be the same as, if not higher than, the cost of repaying your unconsolidated loans
- Once you consolidate your loans into one, the individual loans cease to exist, so you cannot revoke the consolidation for any reason
Talk to your lender(s). They can help you consider the pros and cons of consolidating your loans.Back to top