Federal Loan Consolidation

Combine one or more existing federal student loans into a single new loan.

Eligibility

  • Effective June 1, 2008, borrowers must have at least 1 PHEAA/AES-guaranteed loan to be eligible for loan consolidation.
  • Only federally guaranteed student loans can be included in a federal consolidation.
  • These loans must be in repayment or a grace period.
  • You do not need a co-signer.
  • You do not need to be employed.
  • Your credit rating does not affect your eligibility.

*You may consolidate a prior federal Consolidation Loan if you:

  • Have acquired additional federal education loans since you last consolidated or
  • Did not include all eligible loans in your previous consolidation.

Learn more about consolidation eligibility.

Features & Terms

Features Terms
FIXED Interest Rate
  • Standard consolidation loan is available at today's grace rate of 6.62%.
  • Your rate is calculated as the weighted average of all loans being consolidated, then rounded up to the nearest 1/8 of a percent. Statutory interest is used when calculating the weighted average.
  • If you already have a fixed interest rate on all loans, the consolidation loan will have a higher fixed rate than the original loan.
  • Get a .60% rate reduction for consolidation during your current loan's grace period.
  • Get an immediate .25% rate reduction for automatic direct debit payments.
  • Will not exceed 8.25%.
Incentives
  • Some loans may have incentives that will be lost when the consolidation takes place.
  • If a previous consolidation is included in a new consolidation, current incentives will be lost.
Fees
  • None
Loan Repayment
  • Repayment begins within 60 days of the loan fund payout.
  • The loan funds are sent directly to the creditor.
  • No prepayment penalties.
  • No grace period.
Repayment Term
  • Based on the total loan balance being consolidated, up to 30 years.
Repayment Options
  • May take up to 30 years to pay with flexible repayment options - level, graduated and income sensitive.
Loan Management

Learn more about consolidation terms and repayment.

Effects of Loan Consolidation

  • Locked-in fixed interest rate
  • Longer repayment period
  • Greater interest paid over the life of the loan
  • Single, lower monthly payment to one lender
  • If use direct debit, will need to setup a new arrangement

Loan consolidation will NOT affect your ability to:

  • Pay your loan off early with no penalty
  • Postpone payments via deferment or forbearance
  • Change your repayment plan
  • Maintain a good credit rating

Learn more about advantages and disadvantages.

Apply for this Loan

  • Submit an online consolidation application.

Apply Now!

After You Apply

  • We process your application and contact your existing loan holders, requesting a loan payout.
  • Your loan holders provide us with the necessary information; the old loans are paid off.
  • The balances are transferred to a new loan.
  • We send you a Truth in Lending Disclosure Statement which outlines the term, balance and monthly payment amount of your new loan.
  • We send your first billing statement for your consolidation loan.

Note: The consolidation process takes approximately 6-8 weeks. During this time it is important that you continue to pay the student loan bills you receive.

Check Application Status: Call our automated telephone system toll-free at 1-800-338-5000 to obtain loan information, including the application date, estimated processing time and any information required to process your request.