How to Consolidate Federal Student Loans

Alex Ferreras

LoanSafe Greeter
About Federal Consolidation Loans

A Federal Consolidation Loan for students can potentially be one of the smarter choices out there for students financially in trouble, but it can also be a negative choice as well if you don't do it right, or review all of your possible options first. If you're one of those student who is unfortunately under the burden of having to get student loans, a Federal Student Consolidation loan just might be something to look into. This Direct student loan allows a student to combine multiple federal (not private) student loans into one large loan with a whole new monthly payment plan. All should read this article, top to bottom before doing anything. Keep an open mind and always research further, as Consolidation loans could maybe harm you depending on your situation. However, if you're currently default on one or worse, multiple student loans you must meet specific requirements to consolidate your student loans. Generally, you are eligible to consolidate after you graduate, leave school, or drop below half-time enrollment.

These types of loans are know different then your previous loans, except that it just combines multiple loans into one big loan. They are federal. But take action quickly, as these loans must be acquired no later then after the grace period of your original loans. Be sure to communicate with your loan servicer, as they can let you know when your payments shall be due. The repayment term ranges from 10 to 30 years, depending on the amount of your consolidation loan, your other education loan debt, and the repayment plan you select.

How to Apply

Internet Savvy Students may apply online at this link. Old fashion students can apply over the phone at 1-800-557-7392 if you have all Direct Loans. Or you can print a paper application at this link.. Paper applications must be mailed on with a promissory note. You can receive a mailed package by calling 1-800-557-7392 (TDD 1-800-557-7395) or 334-206-7400 (outside the USA) or sending an e-mail at the website address above.

Consolidation Benefits

  • Packs multiple student loans into a brand new large bill
  • Can lower monthly interest payments
  • Can give you up to 30 years for repayment
  • Brand new alternatives you never knew you could get with previous loans
  • Combines multiple interest of multiple loans into one large interest payment
  • you may prepay your loan at any time without penalty
  • There are no application fees for a Direct Consolidation Loan
Disadvantages of Student Loan Consolidation

  • If you increase the length of your repayment period, you'll also make more payments and pay more in interest
  • You will probably lose benefits you had before with your original loan plans.
  • Once done, consolidation cannot be undone
  • Private education loans are not eligible for consolidation
  • PLUS loans made out to parents of dependent student CANNOT be consolidated (THIS most likely then includes PLUS Student Loans)
Important Facts about student loan consolidation


  • For student loans that are in default, you must either make satisfactory repayment arrangements on the loan with your current loan servicer, or you must agree to repay your new Direct Consolidation Loan under the Income-Contingent Repayment Plan or the Income-Based Repayment Plan
  • Under certain special circumstances you can re consolidate an existing FFEL Consolidation Loan without including any additional loans. You must work with your federal student loan services to make this happen!
  • This is a reminder, that before you consider consolidating your federal student loans to go over this last checklist before you consider anything. This is advised because consolidating a loan is making an entirely new loan with entirely new guidelines, and there is no going back. So remember to
  • go over your current loan documents with your lender or loan servicer
  • Determine what you'd be paying per month with a consolidation vs. what you are paying now or go to this federal loan calculator do this
  • Make the final decision to consolidate! Evaluate your income and possible future expenses.
  • Review any other alternatives
 

Alex Ferreras

LoanSafe Greeter
Below is a list of Direct Student Loans that can possibly be consolidated:

  • Direct Unsubsidized Loans
  • Subsidized Federal Stafford Loans
  • Unsubsidized Federal Stafford Loans
  • Direct PLUS Loans
  • PLUS loans from the Federal Family Education Loan (FFEL) Program
  • Supplemental Loans for Students (SLS)
  • Federal Perkins Loans
  • Federal Nursing Loans
  • Health Education Assistance Loans
  • some existing consolidation loans
To see a full list of federal students loans that may be consolidated go to this link:
www.loanconsolidation.ed.gov or call 1-800-557-7392 or go to. TTY users may call 1-800-557-7395.