Federal Loan Consolidation

What is it?   

A type of federal student loan that combines one or more of your eligible federal education loans into one new loan with a single lender. A new loan is issued to pay off the original loan(s) put into the consolidation

What are the terms?

  • 30 year maximum repayment term
  • Fixed interest rate. The rate is calculated using an average of the rate of the loans that you consolidate. The rate is rounded up to the nearest 1/8th percent and capped at 8.25%
  • Makes you eligible for Public Service Loan Forgiveness if you work in a public service job

Federal Consolidation Eligibility

  • Eligible Loans: FFELP and Direct Stafford Loans (Subsidized & Unsubsidized), FFELP and Direct Graduate Plus Loan, Perkins Loans, FFELP Consolidation & Direct Consolidation Loans. If you have an existing FFELP Consolidation Loan you can consolidate it into the Direct Loan Program if you are planning on applying for Public Service Loan Forgiveness, per CCRAA effective 7/1/2008.
  • Ineligible Loans: Institutional Loans (such as IIT University Loan and Neuman Loan), Private Educational  Loans from banks and credit unions, non-federal loans, and Parent Plus Loans (undergraduate).

When To Apply

  • After you graduate, leave school, or drop below half-time enrollment. Please be aware that if you apply for consolidation before the end of your grace period, your loan will immediately enter repayment.
  • 6 weeks before to the end of the grace period (for spring grads: by mid-October, for fall grads: by mid-May).

How to Apply For Loan Consolidation

  • There are several ways that you can apply for a Direct Consolidation Loan:
  • Apply online at www.studentloans.gov
  • Download a paper copy of the application and promissory note at www.studentloans.gov
  • Apply over the phone if you have all Direct Loans - (800) 557-7392
  • Request an application package be mailed to you by:
  • Calling (800) 557-7392 (TDD (800) 557-7395) or (334) 206-7400 (outside the USA)
  • E-mailing consolidation@mail.eds.com

To consolidate from FFELP Consolidation into Direct Consolidation go to www.studentloans.gov to apply.

When Does Repayment Begin?

Repayment of a Direct Consolidation Loan begins immediately upon disbursement of the loan. (Your first payment will be due within 60 days). We recommend that you use all your 6 month grace period before you start the repayment of your loan consolidation loan. You can indicate this on your loan consolidation application.

Repayment Plans: There are several repayment plans that are designed to meet the different needs of individual borrowers. You will receive more detailed information on your repayment options when you consolidate your loan, and you will be asked to selected a repayment option when you apply for consolidation. 

What if I have trouble repaying the loan?

Under certain circumstances, you can receive a deferment or forbearance that allows you to temporarily stop or lower the payments on your loan. Contact your loan servicer for more information.