:: Can I Consolidate My Loans? ::
Depending on how long you attended school and the borrowing decisions you made along the way, you may end up with multiple loans and/or loan servicers. This can be complicated when making monthly payments and keeping all of your loan information straight.
Loan consolidation allows you to combine all of your federal student loans into a single, more manageable loan with one monthly payment. Consolidating your loan extends your repayment period up to 30 years depending on the loan amount. You may also be able to secure a lower fixed interest rate for your loan(s).
To be eligible for a Federal Consolidation loan, you must have more than one loan to consolidate (unless you wish to consolidate a FFEL loan into a DL loan) and you must either be in your grace period or already in repayment for each of the loans you want to consolidate. You aren’t eligible to consolidate your loans while you’re enrolled in school, but once you start making payments on your consolidation, you can enroll in school again.
The different types of loans that can be consolidated are:
- Federal Stafford (subsidized and unsubsidized)
- Federal PLUS (Direct and FFELP)
- Federal Supplemental Loans for Students (SLS)
- Federal Consolidation
- Federal Direct Student Loans (FDSL)
- Federal Insured Student Loans (FISL)
- Federal Perkins Loans
- Health Professions Student Loans (HPSL), including Loans for Disadvantaged Students (LDS)
- Federal Nursing Student Loans (NSL)
- Health Education Assistance Loans (HEAL)
Loan consolidation may not be the right option for you. You’ll want to consider how much the total interest cost will increase based on smaller installments over a longer payment period. Will the consolidation affect the terms of your current repayment agreement? Consolidation may negatively impact your deferment options and may negate any borrower benefits your current lender provides. Consolidation may affect your loan options; for example, by consolidating a Perkins loan, you forfeit any loan forgiveness benefits and become responsible for interest that accrues during deferment. Talk to your lender(s) or a default prevention specialist about the pros and cons of consolidation.
If you choose to consolidate your loans, you’ll still have the option to choose from the standard, graduated, income-sensitive, income-based or extended (if applicable) repayment schedules. You can calculate your new payment using Mapping Your Future’s loan consolidation calculator.
Learn more about loan consolidation on the U.S. Department of Education website or by calling 800.557.7392 (toll free).
