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What is Student Loan Consolidation?


With about 2/3 of students graduating with student debt, it is common for a college graduate to have various types of student loans, some federal and some private. Typically students are given a 6-month grace period after graduation before payment requirements begin. The Federal Family Education Loan Program (FFELP) and the Federal Direct Student Loan Program (FFELP) allow students to consolidate Federal Perkins Loans, Stafford Loans, and Plus Loans into one new loan. In summary, student loan consolidation takes all your existing federal loans and combines them into one loan, with a low fixed rate.

Technically a payment in full is made to the original lenders (so they are paid off) and the new lender gives you one loan at a low fixed interest rate. This results in minimum scheduled payment amounts being smaller compared to when the loans were broken apart or separate. In most cases, the repayment term is extended and the interest rate is low and fixed. See the "Benefits of Student Loan Consolidation" for a more detailed benefit analysis of consolidating your student loans or start the process of consolidating your student loans by filling out this form here.