Based on the amount of federal student loans you combine, you may be eligible for up to 30 years to repay your student loans.
Direct Consolidation sets a fixed interest rate based on a weighted average of the interest rates on the loans being consolidated, rounded up to the nearest one-eighth of 1%, capped at 8.25%.
This removes the burden from the borrower of trying to keep track of many different loans, with different lenders, balances, and interest rates.
Consolidation programs exist for both federal and private student loans, but the purpose of this page is to discuss federal student loan consolidations.
Even if you have only one defaulted student loan, you may obtain a Direct Consolidation Loan to resolve the default.
Your defaulted federal loan may be consolidated provided that it’s not a previous spousal consolidated loan and you are not subject to a judgment secured through litigation or an order of administrative wage garnishment on a federal student loan for which you’re requesting consolidation.
A student loan consolidation takes the borrowers loans and combines all the loans into one new loan with one lender, and one weighted average interest rate.
Of course, there are also downsides to consolidation.
For example, consolidating certain federal student loans could cause the loss of certain benefits, such as reduced interest rates or repayment incentive programs that are available under the loans being consolidated.