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Education Loan Consolidation
Program DescriptionConsolidation Loans are available to most borrowers of Federal education loans and come from one of two sources:
- Direct Consolidation Loans are made by the U.S. Department of Education. You repay a Federal Consolidation Loan to the U.S. Department of Education. Federal Consolidation Loans are made through the Federal Family Education Loan (FFEL) Program. No new loans are being made under the FFEL Program. All new loans, and therefore consolidation of those loans, are made under the Direct Loan Program.
- Federal Consolidation Loans are made through the Federal Family Education Loan (FFEL) Program. No new loans are being made under the FFEL Program. All new loans, and therefore consolidation of those loans, are made under the Direct Loan Program.
General Program RequirementsGenerally, you are eligible to consolidate after you graduate, leave school, or drop below half-time enrollment. Most Federal student loans are eligible for consolidation, including:
- Direct Subsidized Loans
- Direct Unsubsidized Loans
- Subsidized Federal Stafford Loans
- Unsubsidized Federal Stafford Loans
- Direct PLUS Loans
- PLUS loans from the Federal Family Education Loan (FFEL) Program
- Supplemental Loans for Students (SLS)
- Federal Perkins Loans
- Federal Nursing Loans
- Health Education Assistance Loans
- Some existing consolidation loans
A PLUS loan made to the parent of a dependent student cannot be transferred to the student through consolidation. Therefore, a student who is applying for loan consolidation cannot include the PLUS loan the parent took out for the dependent student’s education.
Borrowers who are in default must meet certain requirements before they may consolidate their loans.
Loan TermsMaximum Loan Amount: None
Interest Rate: Weighted average interest rate on the loans being consolidated, rounded to the nearest one-eighth of 1 percent, not to exceed 8.25 percent. Currently, the interest rate is fixed for the life of the loan. To get an estimate of your interest rate, go to the Online Calculator.
Maximum Loan Length: 10-30 years
Frequency of Payments: Varies
Prepayment penalties: None
Your Next StepsThe following information will lead you to the next steps to apply for this benefit.
Application ProcessYou apply for a Direct Consolidation Loan through StudentLoans.gov.
Once you sign in to StudentLoans.gov using your personal identifiers and <i>Federal Student Aid PIN</i>, you will be able to electronically complete the Federal Direct Consolidation Loan Application and Promissory Note. The electronic application on StudentLoans.gov consists of the following five steps:
1. Choose Loans & Servicer
2. Repayment Plan Selection
3. Terms & Conditions
4. Borrower & Reference Information
5. Review & Sign