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A student loan consolidation is a process of combining one or more loans into a single new loan. Consolidation may mean combining several student loans into one bigger loan from a single lender. The process of consolidation pays off the existing balances on the other loans. This may provide alternative repayment options and make monthly payments more manageable.

Student loan consolidation is available for most federal loans including Stafford, PLUS and SLS, FISL, Perkins, Health Professional Student Loans, NSL, HEAL, Guaranteed Student Loans, and Direct loans. Private student loans cannot be consolidated with federal student loans.

Consolidating Federal Student Loans

Consolidation loans are available for most federal loans. When you consolidate your federal student loans, you are taking a new loan called a federal direct consolidation loan. This new loan combines several federal student or parent loans into one larger loan, which replaces your original federal student loans. You usually won’t get a lower interest rate, but you will benefit from a single monthly payment for your new federal direct consolidation loan.

Consolidating your federal student loans into a federal direct consolidation loan will give you access to several alternate repayment plans which include extended repayment, graduated repayment and IBR (Income-Based Repayment). When you choose to extend your payment can reduce your monthly payment but will increase the total interest paid over the life of the loan.

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