Federal Loan Consolidation

Direct Loan Consolidation information

If you have borrowed multiple federal student loans, you may consolidate them into a new single loan with one monthly payment, where the payment can be significantly lower than that required under the usual repayment options. The William D. Ford Federal Direct Loan (Direct Loan) Program of the federal government provides the loans. You must consolidate during your grace period. You also may wish to consider consolidating your Direct Loans if you have received some of your loans under the variable interest rate (a fixed rate was established on July 1, 2006).

Most federal education loans are eligible for consolidation, including subsidized and unsubsidized Direct Loans and Federal Perkins Loans. Private education loans (alternative loans) are not eligible for consolidation with your federal loans. Parent borrowers also can consolidate their PLUS loans.

Before deciding on applying for a consolidation loan, investigate the regular repayment options available and fully understand the advantages and disadvantages of consolidation. Look into the Interest Rate, Repayment Period, Costs of a Consolidation Loan, and Loss of Loan Cancellation Provisions, among others.

To obtain a complete list of the federal student loans that can be consolidated and for complete information on loan consolidation, contact the Direct Loan Origination Center's Consolidation Department at 1-800-557-7392, or visit loanconsolidation.ed.gov.