Federal Loan Consolidation
Consolidating federal student loans—Unsubsidized, Subsidized, PLUS—may help you manage your debt with a fixed interest rate and a single monthly payment.
How It Works
With loan consolidation, you combine the federal loans belonging to you into a single loan at a fixed interest rate. That means you can't consolidate loans with your spouse. Also, you cannot consolidate private loans with your federal loans.
Your fixed interest rate is determined by taking a weighted average of your loan rates rounded up to the nearest 1/8 percent, never exceeding 8.25%.
- 1 monthly payment
- Longer repayment period
- Possible lower monthly payments
- Payment flexibility with deferment and forbearance options available
- No credit checks (except PLUS loan consolidation may require credit check)
- No fees or prepayment penalties
- Fixed interest rate
- Total cost is higher due to longer repayment period
- Repayment begins immediately after consolidation
- Possibility of higher interest rates
- Could lose benefits such as subsidized interest, deferment, or loan forgiveness
Here are a few resources on federal loan consolidation: