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Loan Consolidation

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 loans.

Consolidation May Lower Your Monthly Payments and Extend Your Repayment Term

If you have a FFELP loan(s) you may be able to consolidate in the Direct Consolidation Loan Program. Contact your servicer(s)/lender(s). If you don't know who your servicer(s)/lender(s) is, go to the Federal Student Aid (FSA) website, which is the central database for all federal student loan information.

For more information, contact the U.S. Department of Education at

The following 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:

  • 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 servicer/lender.

  • Grace Periods and Consolidated 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.

    A 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 servicer/lender.

  • 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 Repayment, Income-Contingent Repayment, 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 Plans section.

  • 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).

    Consolidation presents unique disadvantages for Perkins loan borrowers because it replaces the longer grace periods and cancellation benefits of Perkins loans with the standard federal loan terms.

    Here are some disadvantages to consolidating your loan(s):

    • 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 loan could be the same as, if not higher than, the cost of repaying your unconsolidated loan(s)
    • Once you consolidate your loan(s) into one, the individual loan(s) ceases to exist, so you cannot revoke the consolidation

    Talk to your servicer(s)/lender(s). They can help you consider the pros and cons of consolidation.