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Federal Loan Consolidation

Make sure consolidating your student loans is right for you.

If you're having trouble making your monthly student loan payments, then consolidation may be the right option for you. Federal student loan consolidation allows you to combine one or more existing student loans into a single new loan with a new repayment schedule.

You'll have lower monthly payments, but you will pay much higher interest over the life of the loan because you'll be making smaller payments over a longer time.

Pros Cons
  • Lower monthly payments
  • One bill, one lender
  • No prepayment penalties
  • A fixed interest rate
  • No limit to the number of loans that may be consolidated
  • No required minimum balance per federal rules
  • Possible eligibility for Public Service Loan Forgiveness (PSLF) program if you work in public service
  • A longer repayment period
  • More interest to pay back (calculated as the weighted average of all loans and rounded up to the nearest 1/8 of 1%)
  • Possible loss of current loan incentives
  • Loss of deferment subsidy on Perkins loans

Next Steps

All federal student loan consolidations are now processed by the U.S. government through the Federal Direct Loan Program (FDLP).

Visit StudentAid.gov to get more details and to apply for a consolidation loan or visit StudentAid.gov/PSLF for more information about the PSLF program.

On April 19, 2022, the U.S. Department of Education (ED) announced several changes and updates related to Income-Driven Repayment (IDR) plans to include adjustments to borrower accounts, several one-time loan forgiveness actions, and new policies. Visit our Income-Driven Repayment (IDR) Waiver page for more information.

Joint (Spousal) Consolidation Loan Customers:

On October 11, 2022, the Joint Consolidation Loan Separation Act (JCLSA) was signed into law to allow joint consolidation loan borrowers to separate their joint loan obligations and reconsolidate into new individual Direct Consolidation Loans.

This ED separation and new consolidation process is being developed but will not be fully implemented until late 2024 at the earliest. Visit StudentAid.gov to learn more about this separation process.