Loan Consolidation

What does it mean to consolidate my student loans?
Through loan consolidation, a borrower can combine some or all outstanding student loans into one consolidated loan. Loan consolidation may extend a repayment period, eliminate the hassle of dealing with multiple lenders, allow students to repay a loan as a share of income, and may give students a break on interest costs. Loan consolidations are available from the Department of Education's Direct Loan program, as well as private lenders participating in the Department's government-guaranteed (FFEL) program.

How will the interest rate be calculated?
The interest rate for a Direct Consolidation Loan is the weighted average of the interest rates on the loans being consolidated, rounded to the nearest higher one-eighth of one percent.

Where can I get a direct consolidation loan?
To apply for a loan consolidation through the Direct Loan program, please call the Direct Loan origination center at 1-800-557-7392. An application can be mailed or an application can be downloaded from loanconsolidation.ed.gov. If students have a FFEL loan, the lender may provide the same low rate.

What else do I need to know?

• Borrowers must include at least one direct or FFEL loan in the consolidation loan.
• Borrowers do not have to include all of their student loans in the consolidation loan.
• Borrowers may consolidate a single loan and/or an existing direct consolidation loan.
• There is no consolidation fee and no minimum or maximum loan balance.
• Borrowers may choose from a variety of repayment plans, including one based on income.
• Borrowers may prepay a direct consolidation loan at any time.
• A typical loan consolidation requires 60 to 90 days to process, largely because each lender must respond to our request to verify the loan balance.
• For more information, visit www.finaid.org/loans/consolidation.phtml