Federal Student Loan Consolidation FAQ

How do I combine multiple federal loans into one loan?

Federal student Loan consolidation is a great tool that allows borrowers to combine all of their federal student loans into one new loan.

How long does it take to consolidate student loans?

Consolidation can take anywhere from 30 to 90 days; in rare cases it may take longer. The process to retrieve payoff statements (called LVCs - Loan Verification Certificates) from your lenders takes the longest amount of time.

What are the benefits of federal consolidation loans?

  • Potentially reduce your monthly payment obligation (up to 50% in some cases)
  • Simplified finances - you make only one payment each month
  • Provides budget friendly repayment options such as Income Based Repayment
  • Saves you money today when you need it most!

Student loan consolidation allows borrowers (parents or students) to lock in today's low rates and to combine several federal student loans into one loan, simplifying repayment. Because repayment can be spread over a longer time period, your monthly payment amount will be lower.

What about non-student loan debt, can that be consolidated?

For any other debt you may have, including credit cards and personal loan debt, debt consolidation services exist to help making debt repayment easier and more affordable. You can reduce your debt up to 50% and become debt free in as little as 12-48 months.

Who is eligible for student loan consolidation?

To be eligible for federal student loan consolidation, borrowers must:

  • Not be in default
  • Not be in school more than half time for the loans being consolidation

Here are the things that are not required:

  • You do not need to be employed to consolidate your loans.
  • You do not need to have any form of collateral.
  • You do not need a cosigner of any kind.

What is the interest rate?

The rate will be a fixed rate equal to a weighted average of the interest rates on your existing loans rounded up to the nearest eighth of one percent.

Federal Consolidation interest rates are based on the weighted average of student loan interest rates. Federal Stafford loans disbursed on or after July 1, 2013 have an interest rate of 3.86% (subsidized) and 3.86% (unsubsidized). Federal Parent Plus loans disbursed after July 1, 2013 have a fixed interest rate of 6.41%.

For federal loans disbursed before the 2013-2014 academic year, log into your StudentLoans.gov account to view the most up-to-date interest rate for your loan(s).

Take a look at our Loan Calculator to help you figure out your new rate and monthly payment.


Please note that we cannot guarantee any interest rate due to the time it takes to process an application. We can only provide rough estimates; you should not rely on these estimates for financial planning!

Why? Because consolidation takes between 30 - 60 days, and in that time period, you may be making payments, or your loan status may change. Because your interest rate is determined not only on the type of loan you have, but also on how much you owe, we can make no guarantee except to say that your interest rates will never exceed federally specified, published rates.


What types of loans may be consolidated?

  • Stafford Loans - Subsidized and Unsubsidized
  • HEAL/HPSL Student Loans
  • Parent and Graduate PLUS Loans
  • Existing Federal Consolidation Loans
  • Perkins Loans
  • Nursing School Loans and more...

Can I consolidate my private student loans too?

At this time, it is not possible to consolidate federal and private student loans together. That being said, it's not a bad idea to consolidate your private student loans separately and reap similar benefits.

To learn more, visit our private student loan consolidation section.

BIG TIP! Consolidating your federal student loans first is very important, because in doing so, you reduce the number of open lines of credit (loans) you have. This boosts your credit score, enabling you to obtain better terms for private loan consolidation.

What about credit card consolidation, car loans, etc.

Unfortunately, you cannot combine non-federal loans of any kind with federal student loans. Why? Because they are different types of loans. Federal student loans are backed by the US Government; if a student doesn't pay their loans, the government pays the lender, and then obtains payment from the student. The lending institutions (typically banks) know that they will always get their money back, which is why they can offer student loans at such low rates compared to other kinds of loans.

Private loans, such as credit cards, car loans, mortgages, etc. are backed by an individual's creditworthiness and collateral. Lending institutions take higher risks in loaning money privately than through the government. The government and the banks will not permit low-risk loans to be combined with high risk loans, and so you cannot consolidate other forms of debt with your federal student loans.

However, consolidate student loans to improve your credit and you may be able to qualify for better interest rates on your private loans when you refinance them.

What about consolidating with my spouse?

Due to changes in the Department of Education's policies, spousal consolidation no longer exists. However, you can apply for a service called "joint billing" that will enable you to pay you and your spouse's federal loan bills in one payment each month.

I consolidated in the past, can I do it again?

It depends. Consolidation is the combination of many loans into one. If you have consolidated in the past with someone other than the U.S. Department of Education, you can't do it again unless:

  • You have new student loans that were not included in the original consolidation.
  • Or, you have multiple consolidations from different lenders.

How is the consolidation loan repaid?

The first payment is due no more than 30 days from the date the consolidation loan is disbursed. Repayment schedule choices include:

  • Standard payments (fixed monthly payments over a fixed time)
  • Graduated payments (payments which gradually increase over the years)
  • Income Based payments (variable payment amounts based upon annual income) and
  • Extended payments (more than $30,000 over a 25 year period or more than $60,000 over a 30 year period).

Is there a credit check required to consolidate?

No, there is no credit check because your federal student loans are guaranteed by the U.S. Government.

Are there any early payment/repayment fees or penalties?

No, there are no early repayment penalties for a student loan consolidation. The government wants their money back. To make extra payments, consolidate now, and then when your payment schedule begins, simply specify "Extra payment to principal" on your early payments.

BIG TIP! Did you know that early repayments are interest-free? It's true! Every dollar beyond your required monthly payment is paid towards the principal, this significantly cuts down on your total interest potential over the life of the loan.

Do I continue making loan payments while my consolidation application is in process?

Yes! Until you are notified that your loans have been paid off through the consolidation process, you should continue to make your student loan repayments. Since consolidation can take anywhere from 30 - 90 days, it's important that you don't fall behind on payments.

What do I do if I am not eligible to consolidate?

If you've previously consolidated, have loans with just one lender, loans totaling less than $20,000, or other conditions which prohibit you from consolidating your federal student loans with us, there are a few options you can pursue:

Can I defer or forbear?

Yes! One of the greatest benefits of federal student loan consolidation is that you retain all your federal borrowing privileges, such as:

  • Deferment of your consolidation payments when you return to school
  • Forbearance of your consolidation for up to 36 months
  • Forgiveness of your entire loan if you pass away

How do you defer? Once you consolidate, you will receive paperwork for your payment schedule. At that time, you can request a deferment or forbearance form.

Important Financial Aid Forms!

Why do student loan rates change?

See our page on the relationship between student loans and Treasury bills!

Why Consolidate my Student Loans?

The very best time to consolidate your student loans is immediately after graduating, before your grace period ends. Doing so allows you to lock in the lowest possible interest rate on your loans.

Consolidating is a great option whenever you want to increase your monthly cash flow - by consolidating, you extend your repayment term and get additional discounts on your existing rates, which reduces the monthly payment you make.

Repayment Guidelines

Depending on the total amount of your consolidation loan, the government has set the following repayment periods:

Loan Balance Repayment Period
$30,000 - $39,999.99 20 years
$40,000 - $59,999.99 25 years
$60,000 and above 30 years