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Consolidation Loans

A consolidation loan combines several student or parent loans into one loan from a single lender, which then pays off the balances on the other loans.


Consolidation loans are available for most federal loans, including FFELP (Stafford, PLUS and SLS), FISL, Perkins, Health Professional Student Loans, NSL, HEAL, Guaranteed Student Loans, and Direct loans.

In certain circumstances (for example, when one or more of the loans was being repaid in less than 10 years because of minimum payment requirements), a consolidation loan may decrease the monthly payment without extending the overall loan term beyond ten years. In effect, the shorter-term loan is being extended to 10 years.

A Direct Consolidation Loan has a fixed interest rate for the life of the loan.  The fixed rate is the weighted average of the interest rate on the loans being consolidated, rounded up to the nearest one-eighth of one percent.  There is no cap on the interest rate of a Direct Consolidated Loan.

Further Information

To find out more about loan consolidation, visit Federal Student Aid.