Consolidating your federal student loans can simplify your payments, but it also can result in loss of some benefits.

Learn about consolidation so you can weigh the pros and cons and decide whether a Direct Consolidation Loan is right for you.

Loan Consolidation

A Direct Consolidation Loan allows you to consolidate (combine) multiple federal student loans into one loan. The result is a single monthly payment instead of multiple payments.

Should I consolidate my loans?
What types of loans can be consolidated?
When can I consolidate my loans?
What are the requirements to consolidate a loan?
How do I apply for a Direct Consolidation Loan?
When do I begin repayment?
Are there different repayment plans?
Consolidation Checklist 


Should I consolidate my loans?

Carefully consider whether loan consolidation is the best option for you. Loan consolidation can greatly simplify loan repayment by centralizing your loans to one bill and can lower monthly payments by giving you up to 30 years to repay your loans. You might also have access to alternative repayment plans you would not have had before, and you’ll be able to switch your variable interest rate loans to a fixed interest rate.

However, if you increase the length of your repayment period, you'll also make more payments and pay more in interest. Compare your current monthly payments to what monthly payments would be if you consolidated your loans.

You also should consider the impact of losing any borrower benefits offered with the original loans. Borrower benefits from your original loan, which may include interest rate discounts, principal rebates, or some loan cancellation benefits, can significantly reduce the cost of repaying your loans. You might lose those benefits if you consolidate.

Once your loans are combined into a Direct Consolidation Loan, they cannot be removed. The loans that were consolidated are paid off and no longer exist. Take the time to study the pros and cons of consolidation before you submit your application. Review the Consolidation Checklist to see if consolidation is the best option for you.


What types of loans can be consolidated?

Most federal student loans, including the following, are eligible for consolidation:

  • Direct Subsidized Loans
  • Direct Unsubsidized Loans
  • Subsidized Federal Stafford Loans
  • Unsubsidized Federal Stafford Loans
  • Direct PLUS Loans
  • PLUS loans from the Federal Family Education Loan (FFEL) Program
  • Supplemental Loans for Students (SLS)
  • Federal Perkins Loans
  • Federal Nursing Loans
  • Health Education Assistance Loans
  • some existing consolidation loans

Private education loans are not eligible for consolidation. If you are in default, you must meet certain requirements before you can consolidate your loans.

A PLUS loan made to the parent of a dependent student cannot be transferred to the student through consolidation. Therefore, a student who is applying for loan consolidation cannot include the PLUS loan the parent took out for the dependent student’s education.

For a complete list of the federal student loans eligible for consolidation, contact the Direct Loan Consolidation Center by calling 1-800-557-7392 or go to www.loanconsolidation.ed.gov. TTY users may call 1-800-557-7395.


When can I consolidate my loans?

Generally, you are eligible to consolidate after you graduate, leave school, or drop below half-time enrollment.


What are the requirements to consolidate a loan?

Here are some tips on qualifying for a Direct Consolidation Loan:

  • You must have at least one Direct Loan or FFEL Program loan that is in a grace period or in repayment.
  • If you want to consolidate a defaulted loan, you must either make satisfactory repayment arrangements on the loan with your current loan servicer before you consolidate, or you must agree to repay your new Direct Consolidation Loan under the Income-Contingent Repayment Plan or the Income-Based Repayment Plan.
  • Generally, you cannot consolidate an existing consolidation loan again unless you include an additional Direct Loan or FFEL Program loan in the consolidation. However, under certain circumstances you may reconsolidate an existing FFEL Consolidation Loan without including any additional loans. For additional details, go to www.loanconsolidation.ed.gov.

There are no application fees for a Direct Consolidation Loan, and you may prepay your loan at any time without penalty.


What is the interest rate on a consolidation loan?

A Direct Consolidation Loan has a fixed interest rate for the life of the loan. The fixed rate is based on the weighted average of the interest rates on the loans being consolidated, rounded up to the nearest one-eighth of 1%. However, the rate will not exceed 8.25%.


How do I apply for a Direct Consolidation Loan?

There are several ways to apply.

  • Online application: Apply online at the Direct Consolidation Loan website.
  • Express phone application: Apply over the phone at 1-800-557-7392 if you have all Direct Loans.
  • Paper application: Download a paper copy of the application and promissory note at the Direct Consolidation Loan website or request an application package be mailed to you by calling 1-800-557-7392 (TDD 1-800-557-7395) or 334-206-7400 (outside the USA) or sending an e-mail at the website address above.

When do I begin repayment?

Repayment of a Direct Consolidation Loan can begin 60 days after the loan is disbursed, or sooner. Your loan servicer will let you know when the first payment is due. The repayment term ranges from 10 to 30 years, depending on the amount of your consolidation loan, your other education loan debt, and the repayment plan you select.


Are there different repayment plans?

There are several repayment plans that are designed to meet the different needs of individual borrowers. You will receive more detailed information on your repayment options from your loan servicer when you consolidate your loan. Learn about repayment plans.


Consolidation Checklist

If you are considering consolidating your loans, review the steps below to see whether this is the best option for you.

Step 1: Review your current federal student loans

Check your student loan account online, review your loan documents or contact your lender or loan servicer. If you don’t know who your loan servicer is, you can find out at www.nslds.ed.gov.

Step 2: Determine your current monthly payment amounts

Check your student loan account online or call your loan servicer to determine exactly how much you’re paying each month.

Step 3: Determine your monthly payment amount if you consolidate

Use the Direct Loan Consolidation online calculator or call the Direct Loan Consolidation Center at 1-800-557-7392 to estimate your weighted average interest rate and to see what your loan payments might be under the available repayment plans.

Step 4: Decide if you will consolidate

  • Compare your currently monthly payment amount to what your monthly payment amount would be if you consolidated (see Step 3 above). Would consolidating your student loans decrease your monthly payment amount? How long would you be repaying your loan?
  • If you want to lower your monthly payment amount but are concerned about the impacts of loan consolidation, consider these alternatives:

If you decide consolidation is right for you, go to www.loanconsolidation.ed.gov and complete an application to consolidate your loans. If you are already in repayment, be sure to continue making payments on your loans until consolidation is completed. If you have questions about consolidation, go to www.loanconsolidation.ed.gov or call 1-800-557-7392 (TDD/TTY: 1-800-557-7395).