What is a Student Loan Consolidation?
A Consolidation College Student Loan allows you to combine all the federal college student loans you received to finance your college education into a single student loan. Consolidation of college student loans can significantly lower your monthly payment as well as offer the security of a fixed interest rate and provides the convenience of making one single payment each month.
You can visit the Department of Education’s consolidation college student loan page to apply for a student loan consolidation.
Most federal education college student loans are eligible for consolidation, including subsidized and unsubsidized Direct Student Loans and FFEL Stafford College Student Loans, SLS, Federal Perkins College Student Loans, Federal Nursing Student Loans, and Health Education Assistance Student Loans. Private college student loans are not eligible. PLUS Loan borrowers (parent borrowers) can also consolidate their college student loans.
Do you have manageable monthly student loan payments? If you have trouble meeting your monthly payments, have exhausted your deferments and forbearance options, and want to avoid a default, a Direct Student Loan Consolidation may help you. You can use any online calculator to find out what your new monthly payments would be under each of the repayment plans.
Are too many monthly student loan payments driving you crazy? If you send payments to more than one lender every month, and now want the convenience of a single monthly payment, consolidation is probably right for you. With a Direct Student Loan Consolidation, you will have one single lender - the U.S. Department of Education - and one single monthly payment.
What are the interest rates on your college student loans? If you have variable interest rates on your Federal college student loans, you probably want to consolidate. The interest rate for a Direct College Student Consolidation Loan is fixed for the life of the Direct College Student Consolidation Loan. The interest rate is based on the weighted average interest rate of the college student loans being consolidated, rounded to the next nearest higher one-eighth of one percent and is not allowed to exceed 8.25 percent.
Are you will to pay a huge among over the long term? Like a home mortgage loan or a car loan, extending the years of repayment increases the total amount you will have to pay back.
Do you have many, many more payment left on your college student loan? If you are close to paying off your college student loans, it may not be worth the effort to consolidate and extend your payments out for a few more years.
The following federal college student loans are deemed eligible for consolidation into a Direct College Student Loan Consolidation:
• Direct Subsidized and Unsubsidized College Student Loans
• Federal Subsidized and Unsubsidized Federal Stafford College Student Loans
• Direct PLUS Loans and Federal PLUS Loans (parent loans)
• Direct Consolidation Loans and Federal College Student Consolidation Loans
• Guaranteed College Student Loans
• Federal Insured College Student Loans
• Supplemental College Loans for Students
• Auxiliary College Loans to Assist Students
• Federal Perkins College Student Loans
• National Direct College Student Loans
• National Defense College Student Loans
• Health Education Assistance Student Loans
• Health Professions College Student Loans
• Loans for Disadvantaged College Students
• Nursing College Student Loans
What is an Ineligible Loan?
Some college student loans are always ineligible for consolidation. While these student loans may not be included in a Direct College Student Consolidation Loan, they may be considered in the calculation of the maximum repayment period under the Graduated or Extended Repayment Plan. These ineligible loans include but are not limited to the following:
• Student loans made by a state or private lender and not guaranteed by the federal government
• Primary Care Student Loans
• Law Access Student Loans
• Medical Assist Student Loans
• PLATO Student Loans
