Student Loan Consolidation: Everything You Need to Know

Welcome to our comprehensive guide on student loan consolidation, where we will provide you with all the information you need to make informed decisions about your student debt. With student debt reaching an all-time high, many borrowers are turning to consolidation as a way to simplify their payments and potentially save money. We understand that the process can be overwhelming, so we’ve created this guide to help you navigate your options and make the best choice for your situation.

The Basics of Student Loan Consolidation

Before we dive into the details, let’s first clarify what student loan consolidation is. Simply put, consolidation refers to taking multiple federal student loans and combining them into one loan. This means that instead of making multiple payments to various lenders each month, you’ll only have to make one payment to a single lender. Consolidation can also potentially lower your monthly payment and help you secure a fixed interest rate, which can make budgeting easier.

Who Qualifies for Student Loan Consolidation?

Consolidation is available to most federal student loan borrowers, regardless of whether they’re in repayment, deferment, or forbearance. However, private student loans are not eligible for consolidation through the federal government. Additionally, borrowers must have at least one Direct Loan or Federal Family Education Loan (FFEL) that is in a grace period, repayment, deferment, or forbearance to qualify.

What Types of Federal Loans Can be Consolidated?

The following federal loans can be consolidated:

Loan Type
Direct Subsidized Loans
For undergraduate students with financial need
Direct Unsubsidized Loans
For undergraduate, graduate, and professional students; no requirement to demonstrate financial need
Direct PLUS Loans
For parents of dependent undergraduate students or graduate and professional students; requires credit check
Direct Consolidation Loans
For consolidating multiple federal student loans into one loan
FFEL Consolidation Loans
For consolidating multiple FFEL Program loans into one loan

What are the Pros and Cons of Consolidation?

As with any financial decision, there are pros and cons to consolidating your student loans. Here are some to consider:


  • Simplify your payments by having only one loan to manage and one monthly payment to make.
  • Potentially lower your monthly payment by extending your repayment term and/or securing a lower interest rate.
  • Gain access to income-driven repayment plans, which can help lower your payment if you’re struggling to make ends meet.
  • Protect yourself from default by ensuring you make your payment on time every month.


  • May increase the total amount of interest you pay over the life of the loan, particularly if you extend your repayment term.
  • You may lose certain benefits, such as interest rate discounts or forgiveness options, that were available on your original loans.
  • Consolidation is a one-time option, so there’s no going back once you’ve consolidated your loans.

How to Consolidate Your Student Loans

Now that you have a better understanding of what student loan consolidation is and how it works, here’s how to go about consolidating your federal loans:

  1. Gather your loan information, including account numbers, balances, and interest rates.
  2. Visit the Federal Student Aid website and log in using your FSA ID.
  3. Select “Complete Consolidation Loan Application and Promissory Note” from the dropdown menu.
  4. Follow the prompts to indicate which loans you want to consolidate and choose a repayment plan.
  5. Review and sign the electronic promissory note.
  6. Submit your application and wait for confirmation from your new servicer.

Frequently Asked Questions

1. What is the difference between consolidation and refinancing?

Consolidation is a process offered by the federal government that allows you to combine multiple federal student loans into one loan. Refinancing, on the other hand, is a process offered by private lenders that allows you to take out a new loan with better terms and interest rates to pay off your existing loans. Refinancing is not available through the federal government.

2. Can I consolidate private student loans?

No, private student loans are not eligible for consolidation through the federal government. However, some private lenders offer consolidation and refinancing options for private loans.

3. Will consolidation affect my credit score?

Consolidating your federal loans will not typically have a negative impact on your credit score. However, if you apply for multiple consolidation loans or refinance with a private lender, it may cause a temporary dip in your credit score. It’s important to compare your options carefully and choose the one that is best for your situation.

4. Can I consolidate my loans if I’m in default?

Yes, consolidation can help you get out of default by paying off your defaulted loans and creating a new loan with a repayment plan that works for you.

5. Can I choose my servicer when I consolidate my loans?

No, the federal government will assign your loans to a new servicer after you consolidate. You can view your new servicer by logging into the Federal Student Aid website.

6. Can I still qualify for loan forgiveness after consolidating my loans?

Yes, you may still be eligible for loan forgiveness programs after consolidating your loans. However, certain forgiveness programs may require you to make a certain number of qualifying payments before you’re eligible, so it’s important to research your options carefully.

7. How long does the consolidation process take?

The consolidation process typically takes a few weeks to a few months, depending on the volume of applications being processed by the federal government. It’s important to continue making payments on your current loans until you receive confirmation that your consolidation has been approved.

8. Are there any fees associated with consolidation?

No, there are no fees associated with consolidating your federal loans through the federal government. However, if you refinance with a private lender, you may be subject to fees and penalties.

9. How often can I consolidate my loans?

You can only consolidate your federal loans once, so it’s important to make sure you’re making the right decision for your situation.

10. Can I consolidate my loans with my spouse’s loans?

No, federal consolidation loans are only available for individual borrowers. However, if you and your spouse both have federal loans, you can both consolidate your loans separately.

11. Will consolidation lower my interest rate?

Consolidating your loans may lower your interest rate if you’re able to secure a lower rate than what you’re currently paying on your loans. However, consolidation does not guarantee a lower rate.

12. Can I choose a different repayment plan after consolidating?

Yes, you can choose a different repayment plan after consolidating your loans. However, this may change your monthly payment and the total amount of interest you’ll pay over the life of the loan.

13. Can I make extra payments on my consolidated loan?

Yes, you can make extra payments on your consolidated loan without penalty. This can help you pay off your debt faster and potentially save money on interest charges.


Consolidating your student loans can be an effective way to simplify your payments, potentially lower your monthly payment, and protect yourself from default. However, it’s important to carefully consider the pros and cons and choose the option that is best for your situation. We hope this guide has provided you with the information you need to make an informed decision and take control of your student debt.

If you’re ready to consolidate your loans, visit the Federal Student Aid website to get started. And remember, if you’re struggling to make your monthly payments, there may be other options available to you, such as income-driven repayment plans, deferment, or forbearance. Contact your servicer to learn more about your options.

Closing Statement

Student loan consolidation can be a daunting process, but it doesn’t have to be. By doing your research and understanding your options, you can take control of your student debt and achieve financial freedom. If you have any questions or concerns about the process, don’t hesitate to reach out to your servicer or a trusted financial advisor. We wish you the best of luck on your journey toward student debt relief.