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Financial Literacy

Federal Student Loan Consolidation

If you have multiple federal student loans, a consolidation loan may simplify your repayment by allowing you to combine all your federal loans into a single consolidated loan with one monthly payment. You may consolidate Federal Stafford (bank-based) subsidized and unsubsidized loans, Federal Direct subsidized and unsubsidized loans, and Federal Perkins loans. A parent PLUS loan can be consolidated with other PLUS loans, but not with student loans. There is no application fee to consolidate, so if you are contacted by someone offering to consolidate your loans, you are not dealing with one of the U.S. Department of Education's (ED) loan servicers.

Consolidation may lower your monthly payments and provide access to alternative repayment plans. You will want to compare your current monthly payment to the consolidated payments because if you increase the length of your repayment period, you’ll also make more payments and pay more in interest.

You are eligible to consolidate after you graduate, leave school or drop below less than half-time. You must have at least one federal loan that is in a grace period or repayment. If you have a defaulted loan, you must make satisfactory repayment arrangements with your current loan servicer before you can consolidate, or you must agree to repay your new Consolidation Loan with an alternative plan, such as Income-Based Repayment Plan, Pay As You Earn Repayment Plan or the Income-Contingent Repayment Plan. You cannot consolidate an existing consolidation loan again unless you include an additional federal loan in the consolidation. You may prepay your consolidation loan at any time without penalty. For more details or to learn more about consolidation, visit Federal Student Aid.