Federal Student Loan Consolidation
Consolidate College Loans Directly Through the Federal Government
Oct 7, 2009
Federal Direct Consolidation Loans allow borrowers to combine multiple federal student loans into a single loan to the borrower's advantage. Discover what those benefits are, what kinds of loans can be consolidated and how to apply for federal government student loan consolidation.
Benefits of Federal Government Student Loan Consolidation
Besides the obvious benefit of reduced monthly payments, Federal Direct Consolidation Loans offer additional benefits to the borrower, including:
- One Bill: there is only one lender for federal student loan consolidation, the US Dept of Education, so there is only one monthly bill.
- Four Payment Options: federal student consolidation loans offer four different payment options designed to be flexible enough to meet the varying and changing needs of borrowers. Borrowers may switch between any of the four payment options at any time.
- No Fees or Amount Restrictions: unlike some private lenders who charge fees to set up student consolidation loans and who have set minimum and maximum loan amount requirements, federal student consolidation loans have no restrictions on loan amounts and charge no fees. With federal direct consolidation loans, borrowers can consolidate student loans for free.
- Renewed Deferment: borrowers who have exhausted their deferment privilege on their current federal education loans may receive renewed deferment when they initiate a federal consolidation loan. Private lenders typically don't offer deferment.
Federal Student Loan Consolidation Program—Who Is Eligible?
To qualify for a federal student loan consolidation, borrowers must have at least one federal Direct Loan or one Federal Family Education Loan (FFEL) that is in grace, repayment, deferment, or default status. Student loans in “in-school” status do not qualify for consolidation.
Borrowers without any Direct Loans can take advantage of federal student loan consolidation programs if they include at least one FFEL loan in the consolidation and have been unable to obtain a suitable federal consolation loan with a FFEL lender.
Borrowers may also apply for a federal loan consolidation if they intend to apply for loan forgiveness under Public Service Loan Forgiveness Program.
PLUS loans and Perkins loans can be included in a Federal Direct Consolidation Loan as long as they are combined with a Direct Loan or FFEL.
Health professional student loans can also be consolidated; these include the Health Professional Student Loan, Health Education Assistance Loans, and Nursing Student Loans.
How to Apply for Direct Federal Student Loan Consolidation
- Apply Online (or download a paper application to mail) at the Federal Direct Consolidation Loans Information Center.
- Apply by Phone by calling 1-800-557-7392 (in the US) or 334-206-7400 (outside of the US)
- Request a Paper Application by e-mailing: loan_consolidation@mail.es.com
The Federal Direct Consolidation Loan Program offers standard, graduated, extended, and income contingent repayment plans to suit any budget. Federal student loan consolidation plans often offer lower rates and better repayment terms terms than private lenders. For more information about Federal Direct Consolidation Loans, visit the Direct Consolidation Loans Information Center online.
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