How It Works

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

Here are some factors you should consider when deciding if consolidation is right for you:

Are your monthly payments manageable?
If you have trouble meeting your monthly payments, have exhausted your deferment and forbearance options, and/or want to avoid default, a consolidation may help you.

Do you have too many monthly payments?
If you send payments to more than one lender every month and want the convenience of a single monthly payment, consolidation may be right for you.

What are the interest rates on your loans?
If you have variable interest rates on your Federal education loans, you may want to consolidate. The interest rate for the new loan is fixed for the life of the loan. The rate is based on the weighted average interest rate of the loans being consolidated, rounded to the next nearest higher one-eighth of one percent and cannot exceed 8.25 percent.

How much are you willing to pay over the long term?
Like a home mortgage or a car loan, extending the years of repayment may increase the total amount you have to repay.

How many payments do you have left on your loans?
If you are close to paying off your student loans, it may not be worth the effort to consolidate or extend your payments.