Loan Consolidation

A Direct Consolidation Loan allows a borrower to consolidate (combine) multiple federal student loans into one new loan.  The result is a single monthly payment instead of multiple payments.

Eligible Loans

Eligible loans include Direct Subsidized and Unsubsidized Loans, Direct PLUS Loans,  FFEL Stafford Loans, FFEL PLUS Loans, Supplemental Loans for Students (SLS), Federal Perkins Loans, Federal Nursing Loans, Health Education Assistance Loans, and, in some cases, existing consolidation loans. Private education loans are not eligible for consolidation through the Federal Direct Consolidation loan program.

Interest Rate

The fixed rate is based on the weighted average of the interest rates on the loans being consolidated, rounded up to the nearest one-eighth of 1%. However, the rate will not exceed 8.25%.


Repayment begins immediately upon disbursement of the loan. (The first payment will be due within 60 days.) The repayment term ranges from 10 to 30 years, depending on the amount of your consolidation loan and your other education loan debt and the repayment plan you select.


Consolidation offers lower monthly payments by giving you up to 30 years to repay your loans. However,  increasing the length of your repayment period means you will make more payments and pay more in interest than you would otherwise.  If you don't need monthly payment relief, you should compare the cost of repaying your unconsolidated loans against the cost of repaying a consolidation loan.

Once your loans are combined into a Direct Consolidation Loan, they cannot be removed. The loans that were consolidated have been paid off and no longer exist. Take the time to study the pros and cons of consolidation before you submit your application.

Application Process

To begin a new Direct Consolidation Loan application, a borrower will sign in to and complete the steps below:

  • 1 – Choose Loans & Servicer

  • The applicant's federal education loan information will be retrieved from NSLDS and will populate within the application.  The applicant can choose which loans to include in the consolidation.

    An applicant who has a loan that is still in the grace period and wants to consolidate that loan will be able to choose to delay the processing of the application until closer to the end of the grace period.

    An applicant will choose the federal loan servicer that he or she wants to complete the consolidation.  The four consolidation servicers are: FedLoan Servicing (PHEAA), Great Lakes Educational Loan Services, Inc., Nelnet, and Sallie Mae.

  • 2 – Repayment Plan Selection

  • An applicant will select a repayment plan.  An applicant who is interested in one of the “income-driven” repayment plans will be able to complete the electronic repayment plan request form as part of the Direct Consolidation Loan process.

  • 3 – Terms & Conditions

  • An applicant will review terms and conditions as well as the Privacy Act notice.

  • 4 – Borrower & Reference Information

  • An applicant will enter address, contact, employer, and reference information.

  • 5 – Review & Sign

  • An applicant will review information and edit, if necessary, before signing and submitting the Federal Direct Consolidation Loan Application and Promissory Note.

Once the application is submitted, the selected servicer will complete the processing and follow-up with the applicant.


Consolidation FAQ Consolidation information