Loan Consolidation

Consolidation loans are a type of student loan the borrower can get once they are out of school.  The consolidation loan allows the student to combine all of their federal student loans (Stafford subsidized, Stafford unsubsidized, and Perkins) together, resulting in one monthly payment.  The interest rate is the weighted average of the interest rates on the loans being consolidated, rounded up to the nearest 1/8th of a percent (capped at 8.25%).

The benefits of consolidation are two fold: 1) it allows the borrower to lock in an interest rate while the rates are low and 2) reduces the monthly obligation by extending the repayment length from 10 years to a maximum of 30 years, depending on the amount of total debt included in the consolidation.  You can consolidate only once, so it is important to understand all of your options prior to consolidation.  Private loans cannot be included in a federal consolidation loan.

For some students, consolidation may not be the best choice.  Feel free to contact your current loan holder or our office for more information. You can also view/apply for the Federal Direct Consolidation Loan.