Federal Direct Consolidation Loan: Who Qualifies and What You Get
Learn how to combine multiple federal loans into a single monthly payment and the potential impact on your loan forgiveness eligibility.
This scheme allows you to combine several different federal student loans into one single loan with one monthly payment.
Who it's for
This is for borrowers who currently hold multiple federal student loans and want to simplify their debt management.
What you get
You gain the ability to manage your debt through a single monthly payment instead of tracking several different loans. This process combines your various federal loans into one consolidated loan.
What it costs you
There is no fee to apply for this consolidation. Instead of a new interest rate, your new interest rate will be a weighted average of the rates on the loans you are combining.
The catch to know
If you are aiming for Public Service Loan Forgiveness (PSLF), you must be careful. Consolidating existing loans that already have credit toward that forgiveness program may cause you to lose that progress.
How to apply
- Gather your information regarding your current federal loans.
- Visit the official student aid website.
- Complete the online application to start the consolidation process.