What Qualifies for Federal Student Loan Consolidation?

What Qualifies for Federal Student Loan Consolidation?

Federal loan consolidation can include Federal Stafford Loan consolidation, PLUS Loan consolidation, Direct Loan consolidation as well as Perkins Loans, HEAL Loans and all Federal FFELP and Direct Loans taken to pay for your education. Private student loan consolidation is different - You will lose your federal loan benefits if you consolidate your federal loans into a private loan consolidation.

Get Started on your Federal Loan Consolidation »

Managing Existing Student Loan Debt Obligations:

1. If you're having trouble meeting your student loan payments, contact your loan servicer. You may qualify for a deferment, forbearance, or repayment alternative that is more affordable.
2. Consolidation can help by extending your loan's repayment term beyond the standard ten years. While this will increase the total interest charges, the monthly payments will become more manageable.
3. Watch your expenses! Just as you need to be cautious when you're in school, you need to be aware of your expenses after you leave school.
4. Limit credit card usage to absolute necessities. Remember you'll pay more for every charged item because of the credit card's finance charges.
5. If you must have student credit cards, shop around for low interest rates or call existing credit card providers and ask them for a lower rate.
6. If you are delinquent or in default, visit our Student Loan Default Assistance page for more help.

Federal Student Loan Consolidation

Federal student loan consolidation is a fixed-rate refinancing program that combines all of your existing federal student loans into one new loan. Consolidation is a great tool for managing your finances - providing immediate payment relief and long term benefits.

• Cut your monthly student loan payment up to 50%
• Simplify your finances down to only 1 payment and 1 loan
• No credit checks, fees, or application charges

Get Started on your Federal Loan Consolidation »

Federal Student Loan Consolidation Payment Relief

One of the key benefits of consolidating your federal school loans is payment relief. By combining all of your student loans into one consolidated loan, you can lengthen your repayment term from the standard 10 years to up to 30 years, depending on the amount of your education debts.

With a lower monthly payment, you'll have more money available to meet other living expenses, including car payments, housing expenses, and career-related necessities. Because there are no penalties for overpayment, you can make larger payments and reduce your repayment term when it becomes affordable. Learn more about how student loan consolidation works in this step-by-step tutorial.

Other Benefits of Private Student Loan Consolidation:

Other Benefits of Private Student Loan Consolidation:

• Lower Monthly Payments: With private student loan consolidation, most borrowers can reduce their monthly payment by extending the repayment term of their private student loan debt.
• Reduced Interest Rates: Borrowers with improved credit may often lower their interest rate. Existing loan holders will not reduce your interest rate if your credit has improved.
• Rate Reductions: Borrowers may apply on their own or with a credit-worthy co-signer for private student loan consolidation. Borrower and Co-signers with superior credit may receive lower APR loans.
• Internship/Residency & Military Deferment: A 48 month deferment for medical/dental residents and a 36 month deferment for all active-duty military personnel.
• Repayment Term: Undergraduate borrowers may receive up to a 25 year repayment term which offers the lowest possible monthly payment, and graduate student borrowers may receive up to a 30 year repayment term.
• No Prepayment Penalties: All payments in excess of scheduled payments go directly to principal.

Private Student Loan Consolidation

Private student loan consolidation is a great way to significantly lower your monthly loan payments by combining all your private student loans into one manageable loan. Refinancing your private student loans will reduce the stress of multiple payments and allow you to budget more effectively while lowering your interest rate.

Apply Now for Private Student Loan Consolidation »

Here's a chart showing your potential savings with a private student loan consolidation:

Loan Amount	Assumed Current Payment*	Initial Monthly Payment**	Monthly Savings	Annual Savings
$10,000.00	$88.77	$69.41	$19.36	$232.32
$30,000.00	$269.00	$208.22	$60.78	$729.36
$50,000.00	$448.33	$347.20	$101.13	$1,213.51
$75,000.00	$672.49	$520.55	$151.94	$1,823.28
$100,000.00	$896.65	$694.07	$202.58	$2,430.96

*Assuming a 15 year loan term, with an original rate of 6.8%
**Assuming extended term of 25 years at same rate of 6.8%
***Interest rate and the resulting monthly payment(s) contingent upon borrower and/or co-signer credit

Note: Visit our Private Student Loan Interest Rates page for additional details. 

Federal loans disbursed before July 1, 2006

* Currently, the interest rates for Federal loans disbursed before July 1, 2006 are at an all time low:

• Stafford Loan (in school/grace period): 1.88%
• Stafford Loan (in repayment): 2.48%
• Federal PLUS loan: 3.28%

Get Started on your Federal Loan Consolidation »

If you still have Federal loans at a variable interest rate now is the time to consolidate. When you consolidate Federal loans the interest rate is the weighted average of all your loans rounded up to the nearest 1/8 percent. This would result in final consolidation interest rates of:

• Stafford Loan (in school/grace period): 2.0%
• Stafford Loan (in repayment): 2.50%
• Federal PLUS loan: 3.38% 

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* Interest rates on Federal Stafford Subsidized and Unsubsidized Loans change yearly but will never exceed 8.25%.

Federal Student Loan Consolidation Interest Rates

If reducing your monthly payment obligation on your student loans is a big goal, then learning more aboutstudent loan consolidation interest rates is absolutely crucial. Your payment could be up to 20% more or less each month depending on what your interest rate clocks in at.

Federal Student Loan Consolidation Rates

The interest rates for federal student loan consolidations are based on the weighted average of student loan interest rates. View the chart below to see where your loan falls in the spectrum.

Stafford Loan Interest Rates

Note: Graduate Stafford Loans (both subsidized and unsubsidized) have a fixed interest rate of 6.8% through 2013.

Academic Year	Subsidized Rates	Unsubsidized/Graduate Rates
2010-11	4.50%	6.80%
2011-12	3.40%	6.80%
2012-13	6.80%	6.80%
Current Stafford Loan interest rates in effect from 07/01/2010 to 06/30/2011

Federal student loans will have different rates depending on type and disbursement dates. For example, rates for Stafford loan disbursed before July 1, 2006 will remain variable until consolidated.