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Student Loan Consolidation: Should I consolidate My Student Loans?

Student loan consolidation allows you to combine multiple loans into a single loan, so you have one interest rate and one payment to make every month. Consolidating your student loans can open you up to additional loan repayment plans and forgiveness programs.


Are All Your Student Loans Eligible?

So, what’s the catch? Only federal student loans can be consolidated. Private-plus-federal and private only loans aren’t eligible, though they can be refinanced, which is similar. Almost all federal student loans are eligible for consolidation, including the following:

  • Subsidized Federal Stafford Loans
  • Unsubsidized and Nonsubsidized Federal Stafford Loans
  • PLUS loans from the Federal Family Education Loan (FFEL) Program
  • Supplemental Loans for Students
  • Federal Perkins Loans
  • Nursing Student Loans
  • Nurse Faculty Loans
  • Health Education Assistance Loans
  • Health Professions Student Loans
  • Loans for Disadvantaged Students
  • Direct Subsidized Loans
  • Direct Unsubsidized Loans
  • Direct PLUS Loans
  • FFEL Consolidation Loans and Direct Consolidation Loans (only under certain conditions)
  • Federal Insured Student Loans
  • Guaranteed Student Loans
  • National Direct Student Loans
  • National Defense Student Loans
  • Parent Loans for Undergraduate Students
  • Auxiliary Loans to Assist Students

If you don’t see your loan listed but know that it’s federally funded, you likely have nothing to worry about.


What you need to know

The biggest thing you should be aware of is that you will likely only have one chance to consolidate your student loan debt. The exceptions are if you take out new federal student loans that weren’t included in the first round, you default on a Federal Family Education Loan (FFEL), or you sign up for the public service loan forgiveness program.


Should You Consolidate Your Student Loans?

Consolidating your federal student loans could be a good idea if:

  • You won’t have to pay anything to consolidate them.
  • You can get a fixed interest rate and not a variable rate.
  • You can get an interest rate lower than your current net interest rate.
  • You can secure a repayment period that isn’t longer than your original repayment period.
  • You can stay motivated to pay off your student loan debt as quickly as possible.


How to Consolidate Your Federal Student Loans

The process is relatively simple, though you’ll need to complete your application in one sitting—so make sure you’re prepared! Go to studentloans.gov and click on “Complete Consolidation Loan Application and Promissory Note,” then gather all the documents listed in the “What do I need?” section. Then:

  1. Enter the loans you do and do not want to consolidate.
  2. Choose a repayment plan.
  3. Read the terms and submit the form.

You will need to continue making payments on your loans until your servicer confirms consolidation is complete.


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