Consolidation
Loan consolidation allows you to combine one or more existing student loans into a single new loan. Consolidation may be the right option if you:
- Have multiple loans and/or multiple student loan servicers
- Have significant student loan debt
- Have more than one type of federal loan
- Have loans with variable interest rates and you want a fixed interest rate
- Are having trouble paying the minimum amount due on your multiple loans
Find out if you meet the eligibility requirements. Also make sure you understand the pros and cons of loan consolidation.
The pros
- One servicer, one bill, one payment—Managing one loan with one monthly payment is more convenient than managing multiple loans.
- Lower monthly payments—Consolidation may make your monthly payments more affordable for you.
- Fixed interest rate—The government calculates interest rates every July 1, and the rates can go as high as 8.25%. Consider consolidating to a fixed rate when interest rates are low.
- Loan forgiveness—If you work full-time in a public service position and have FFELP (Federal Family Education Loan Program) Loans, a Direct Consolidation Loan is necessary to become eligible for Public Service Loan Forgiveness.
The cons
- Longer repayment schedule—Consolidation may extend how long you have to pay off student loans, sometimes up to 30 years.
- More interest to pay—You pay more interest if you make payments over a longer time.
- Loss of loan incentives—When you combine multiple loans into one, you may lose any incentive programs on the individual loans that you combined.
Supporting Content
Don't know who your loan servicer is?
Check the National Student Loan Data System to see a complete snapshot of your federal student aid. You will need your PIN to access this information.