Education Consolidation Loans

General Loan Program Requirements
Through FFEL or a Direct Stafford Consolidation Loan, you can consolidate various federal student loans into one loan while you're in your grace period, once you have entered repayment, or during periods of deferment or forbearance. You can also obtain a Direct Consolidation Loan (but not a FFEL Consolidation Loan) while you're in school. You must, however, be attending at least half time and have at least one Direct Loan or FFEL in an "in-school period." (Generally, your loan is in an in-school period if you have been continuously enrolled at least half time since the loan was disbursed.) In addition, if the school you're attending does not participate in the Direct Loan Program, at least one of the loans you consolidate must be a Direct Loan.

PLUS loans are eligible for consolidation once they are fully disbursed.

Borrowers who are delinquent or in default must meet certain requirements before they may consolidate their loans. Contact your loan holder for more information.

Under FFEL consolidation, if the same holder holds all the loans you want to consolidate, you must obtain the Consolidation Loan from that holder, unless you haven't been able to get a loan with income-sensitive repayment terms that are acceptable to you.

To get a Direct Consolidation Loan, you must consolidate at least one Direct Loan or FFEL. If you don't have a Direct Loan but you have a FFEL, you must first contact a FFEL lender that makes FFEL Consolidation Loans to ask about obtaining a FFEL Consolidation Loan.

Loan Program Description
A FFEL or Direct Consolidation Loan allows you (or your parents, if they have a PLUS Loan for you) to combine several types of federal student loans into a single loan with one monthly payment. Payments (and interest rates) might be significantly lower with a consolidation loan. Under the Federal Family Education Loan (FFEL) Program, banks, secondary markets, credit unions, and other lenders provide the consolidation loans. Under the William D. Ford Federal Direct Loan (Direct Loan) Program, the federal government provides the loans.

Most federal education loans are eligible for consolidation, including subsidized and unsubsidized Direct and FFEL Stafford Loans, SLS, Federal Perkins Loans, Federal Nursing Loans, and Health Education Assistance Loans. Private education loans are not eligible.

To obtain a complete list of the federal student loans that can be consolidated

Loan Terms
The loan terms for an Education Consolidation Loan are as follows:

Maximum Loan Amount: none
Interest Rate: weighted average interest rate on the loans being consolidated, rounded to the nearest one-eighth of one percent, not to exceed 8.25%. The interest rate is fixed for the life of the loan, which means it will not change.
Maximum Loan Length: 30 years
Frequency of Payments: monthly
Prepayment penalties: none
Fees: varies, depending on the lender

Loan Application Process
To apply for a Direct Consolidation Loan, contact the Loan Origination Center's Consolidation Department at 1-800-557-7392. TTY users for the hearing impaired may call 1-800-557-7395. To apply for a FFEL Consolidation Loan, contact the consolidation department of a participating lender for an application or more information.

Loan Managing Agency
U.S. Department of Education