You may lower your monthly federal student loan payment by consolidating your federal student loans with different interest rates, repayment plans and loan holders into a new loan. However, consolidation may have some disadvantages, so carefully consider the pros and cons. To consolidate, you must be in your grace period or repaying your loans.
Loans You May Consolidate:
- FFELP Stafford Loan (subsidized or unsubsidized)
- Federal Direct Loan (subsidized or unsubsidized)
- FFELP and Federal Direct Parent PLUS Loan
- FFELP and Federal Direct Grad PLUS Loan
- FFELP and Federal Direct Consolidation Loan
- Perkins Loan
- Health Professions Student Loan (HPSL)
- Health Education Assistance Loan (HEAL)
- Nursing Student Loan (NSL)
- SLS Loan (formerly ALAS Loan)
- Federal Insured Student Loan (FISL)
The interest rate is a fixed, weighted average of all the loans you consolidate, rounded to the next highest 1/8%, up to 8.25%.
You can choose a standard, graduated, income-contingent, income-based, or if applicable, an extended repayment plan and may change repayment plans at any time. However, borrowers who are required to repay under the income-contingent plan must make three consecutive monthly payments before changing to another plan. There is no limit to the number of times you may change plans. You will repay the loan over 10 to 30 years, depending on the initial balance of the consolidation loan and the repayment plan chosen.
You can apply for a federal direct consolidation loan by visiting https://studentaid.ed.gov/sa/repay-loans/consolidation. If you are making payments on your federal student loans, talk to your loan holder about temporarily stopping them while your consolidation loan is processed.