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Direct Loan Consolidation

A Federal Direct Loan Consolidation is a federal loan program offered by the U.S. Department of Education that allows borrowers to combine one or more federal student loans into one new loan. As a result of consolidation, students will have to make only one student loan payment each month on their federal student loans, and the amount of time they have to repay the loan will be extended.

Direct Loan Consolidation combines several student or parent loans into one bigger loan from a single lender, which is then used to pay off the balances on the other loans. They also provide an opportunity for alternative repayment plans, making monthly payments more manageable.

  • Consolidation lets you combine all of your Direct and/or Stafford loans into a single loan.
  • Students who are in school are not eligible to consolidate their loans.
  • Students may consolidate while they are either in their grace period or in repayment.
  • Consolidating during a grace period can result in losing some of the grace period but waiting until the loans are in repayment will result in a higher interest rate.

More information about consolidation of loans