Student Financial Aid
Federal student and parent loan consolidation programs
Federal Student Loan Consolidation is a program available to students and former students with federal student loans. The program essentially allows student loan borrowers of any federal student loan (Perkins, Stafford, Direct Subsidized or Direct Unsubsidized Loans) an opportunity to combine all individual monthly loan payments into one monthly payment. Consolidation generally extends the repayment period, resulting in a lower monthly payment. However, you will pay more interest if you extend your repayment period through consolidation. Upon application approval, the new consolidated loan lender or servicer pays off the individual loans (being considered for consolidation) and creates a brand new loan in the student borrower’s name. New interest rates, repayment options/incentives, and applicable benefits or fees apply.
Federal Parent Loan for Undergraduate Student (PLUS) Loan Consolidation Program is the equivalent consolidation loan program available to parent loan borrowers. Parents with multiple PLUS loans may consolidate all of their monthly loan payments into one monthly payment under this program, even if the loans were approved for multiple students.
The following information applies to both student and parent loans:
The interest rate of the consolidated loan is calculated by a weighted average of the interest rates of the loans included in the consolidation. The lender or servicer will be able to help determine the interest in a specific situation. Changes in interest rates, if applicable, are made annually on July 1st.
Questions to ask consolidation representatives prior to supplying personal information:
Rebates and/or repayment incentives are generally available. These include the following:
Pros and Cons of consolidation options:
Educational loans currently unavailable for consolidation with Federal Student Loans include:
Be sure to review all your options before consolidating the following loans:
Information on loan consolidation and loan comparison calculators are available at www.finaid.org. This site is not affiliated with any specific lender or agency and will provide an unbiased view of the options that may be available. Many lenders and loan servicers have calculators on their specific sites that may also be useful. The Direct Loan Consolidation Center at 1-800-557-7392 or www.loanconsolidation.ed.gov is just one of these servicers.