Loan Consolidation | Financial Aid

A Direct Consolidation Loan allows a borrower to consolidate (combine) multiple federal student loans into one loan. The result is a single monthly payment instead of multiple monthly payments.

General information

  • While loan consolidation can simplify loan repayment and lower your monthly payment, it also can significantly increase the total cost of repaying your loans.
  • Offers lower monthly payments by giving you up to 30 years to repay your loans
    • If you increase the length of your repayment period, you'll also make more payments and pay more in interest than you would otherwise (can double total interest expense).
  • Once your loans are combined into a Direct Consolidation Loan, they cannot be removed.

Reasons to consolidate

  • To reduce your monthly loan payment and increase monthly cash flow
  • To have the convenience of single statement billing (if you have federal loans with more than one lender)
  • To renew eligibility for current deferments or become eligible for new deferments
  • To lock in a fixed interest rate on your variable rate loans for the life of the loan/li>

Reasons not to consolidate

  • Potential for higher interest cost because consolidation loan is repaid over longer period of time
  • Loss of any current repayment incentives you are receiving on the loans you plan to consolidate
  • Possible loss of discharge provisions for certain loans, if consolidated (i.e. Federal Perkins Loans)
  • Possible loss of interest subsidy during deferment for certain loans, if consolidated (i.e. Federal Perkins Loans)
  • Some lenders require a minimum loan amount before you can consolidate.

What kinds of loans can be consolidated?

  • Subsidized and Unsubsidized Direct and FFEL Stafford Loans
  • Direct and FFEL PLUS Loans
    • A PLUS Loan made to the parent of a dependent student cannot be transferred to the student.
  • Supplemental Loans for Students (SLS)
  • Federal Perkins Loans
  • Federal Nursing Loans
  • Health Education Assistance Loans
  • Private education loans are not eligible for consolidation.

When can I consolidate my loans?

Generally, you are eligible to consolidate after you graduate, leave school or drop below half-time enrollment.

What are the requirements to consolidate a loan?

  • You must have at least one Direct Loan or Federal Family Education Loan (FFEL) that is in grace or repayment.
  • You can consolidate most defaulted education loans if you make satisfactory repayment arrangements with the current loan servicer(s) or agree to repay your new Direct Consolidation Loan under the Income Contingent Repayment Plan or the Income Based Repayment Plan.

If you consolidate your loans, you do not need to pay any application fees and you will not be charged any prepayment penalties.

When do I begin repayment?

Repayment of a Direct Consolidation Loan begins immediately upon disbursement of the loan. (Your first payment will be due within 60 days.) The payback term ranges from 10 to 30 years, depending on the amount of education debt being repaid and the repayment plan you select.

How do I apply for a Direct Consolidation Loan?

There are two ways that you can apply for a Direct Consolidation Loan:

  1. Apply online at under the Manage Loans dropdown.
  2. Download a paper copy of the application and promissory note at

I still have questions, where do I go?

Find more information on the Federal Student Aid website:

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