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Federal Loan Consolidation

Make sure consolidating your student loans is right for you.

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

You'll have lower monthly payments, but you will pay much higher interest over the life of the loan because you'll be making smaller payments over a longer time.

Pros Cons
  • Lower monthly payments
  • One bill, one lender
  • No prepayment penalties
  • A fixed interest rate
  • No limit to the number of loans that may be consolidated
  • No required minimum balance per federal rules
  • Eligible for a special 0% interest rate during the duration of the CARES Act
  • Possible eligibility for Public Service Loan Forgiveness (PSLF) program if you work in public service
  • A longer repayment period
  • More interest to pay back (calculated as the weighted average of all loans and rounded up to the nearest 1/8 of 1%)
  • Possible loss of current loan incentives
  • Loss of deferment subsidy on Perkins loans

Next Steps

All federal student loan consolidations are now processed by the U.S. government through the Federal Direct Loan Program (FDLP).

Visit to get more details and apply for a consolidation loan or visit for more information about the PSLF program.

On April 19, 2022, the U.S. Department of Education (ED) announced several changes and updates related to Income-Driven Repayment (IDR) plans to include adjustments to borrower accounts, several one-time loan forgiveness actions, and new policies.

The changes that will update IDR counts will impact both Direct Loans and federally managed Federal Family Education Loan Program (FFELP) loans. Commercial FFELP borrowers, such as those borrowers with loans serviced by AES, seeking to take advantage of these changes must consolidate their commercial FFELP loans into a Direct Consolidation loan no later than May 1, 2023. Federal Student Aid (FSA) expects the changes will be implemented in July of 2023. For more information, please visit