Federal Loan Consolidation

Make sure consolidating your student loans is right for you.

Federal student loan consolidation allows you to combine one or more existing student loans into a single new loan. If you're having trouble making your monthly student loan payments, then consolidation might be the right option for you.

Consider This First

  • More interest to repay.
    Although a consolidation loan offers a longer repayment term and lower monthly payment, you will have a much higher interest payback over the life of the loan because you're making smaller payments over a longer period of time.
  • Eligibility.
    Effective June 1, 2008, borrowers must have at least 1 PHEAA/AES-guaranteed loan to be eligible for federal loan consolidation. Learn more.
  • Explore other options first.
    If you can manage a smaller payment or if you're experiencing a financial hardship, you might want to consider other options.

Pros and Cons of Consolidation

There are advantages and disadvantages to consolidating your student loans. We've included some below to help you make the best decision for your situation.

Pros Cons
  • Lower monthly payments
  • Pay just one bill to just one lender
  • No prepayment penalties
  • Extend your repayment period
  • Fixed interest rate
  • No limit to the number of loans that may be consolidated
  • No required minimum balance per federal rules
  • Longer repayment period
  • More interest to pay back
  • May lose current loan incentives
  • Interest rate is calculated as the weighted average of all loans being consolidated, then rounded up to the nearest 1/8 of a percent
  • Perkins loans do not retain their deferment subsidy

Next Steps

  1. First, review the federal loan consolidation eligibility requirements and features & terms.
  2. Then, if you think consolidation is the right choice for you, submit an online federal consolidation application.