Consolidation Loans

A Consolidation Loan helps student and parent borrowers simplify repayment by allowing the borrower to consolidate several types of federal student loans with different repayment schedules into one loan. There is no application fee to consolidate your federal student loans into a Direct Consolidation Loan. If you are contacted by someone offering to consolidate your loans for a fee, you are not dealing with one of the U.S. Department of Education’s (ED’s) consolidation servicers.

Should You Consolidate Loans?

Centralizing your loans to one bill and lowering monthly payments to 30 years for payment can be a great thing. You may have access to alternative payment plans you would not have before. But if you increase the length of your repayment period, you will make more payments & interest.

Once your loans are combined into a Direct Consolidation Loan, they cannot be removed. The previous loans that were consolidated are paid off.

What Types of Loans Can Be Consolidated?

The following education loans are eligible for consolidation:

  • Direct Subsidized Loans (DSL)
  • Direct Unsubsidized Loans (DUL)
  • Direct PLUS Loans (DPL)
  • Subsidized Federal Stafford Loans
  • Unsubsidized Federal Stafford Loans
  • PLUS loans

How Do I Apply For A Direct Consolidation Loan?

You apply for a Direct Consolidation Loan via Federal Student Aid

Once you sign in, you will be able to electronically complete the Federal Direct Consolidation Loan Application . The electronic application consists of the following five steps:

  1. Choose Loans & Servicer
  2. Repayment Plan Selection
  3. Terms & Conditions
  4. Borrower & Reference Information
  5. Review & Sign

If the student plans to borrow for graduate school, they can consolidate their undergraduate loans during their grace period and defer payment on the combined loan once they return to graduate school.