How to Consolidate Your Student Loans

If you have multiple student loans, you may be able to combine them, simplify your payments, or potentially lower your monthly payment. Consolidating federal student loans may help simplify repayment by combining multiple loans into one. But it may not lower your total costs.

This guide explains how federal student loan consolidation works, who qualifies, what it costs, and how consolidation differs from refinancing private student loans.

How to Consolidate Federal Student Loans

You can apply to consolidate your federal student loans for free using the federal Direct Consolidation Loan program on the Federal Student Aid website. You must meet federal eligibility requirements, which are detailed below.

Take these steps to apply for federal student loan consolidation:

1. Gather your loan information. Have your federal student loan, loan servicer, and financial information ready before you begin.^[1]

2. Complete the application. It doesn’t take long to complete the application if you have all your information ready. It’s best to finish in a single session, but you can save your application to complete later if needed.

3. Choose a servicer and repayment plan. You can stick with your current servicer or choose a different one. You’ll also need to select a repayment plan that best fits your situation.

4. Review the loan summary statement. Review the completed application and promissory note carefully before submitting them. Confirm the loans you’re consolidating, any you’re not, and your new loan terms.

5. Keep making payments on your existing loans. Continue paying your existing loans until your new Direct Consolidation Loan is active and your old loans show as paid off.^[2]

Federal student loan consolidation is free. You don’t need to pay a company to submit the application for you.

What Happens When You Consolidate Student Loans?

Consolidating replaces one or more eligible federal education loans with a single Direct Consolidation Loan and one monthly payment. Your new fixed interest rate uses the weighted average of the rates on the loans you consolidate, rounded up to the nearest one-eighth of 1%.

Unpaid interest can increase your principal balance. Consolidating can also add to your repayment period. Choosing an income-driven repayment (IDR) plan may lower your monthly payment.

Below, you’ll find out more about what can happen after consolidation.

Loan Consideration	What Happens After Consolidation
Number of loans/payments	Eligible loans become one Direct Consolidation Loan with a single payment
Interest rate	Weighted average interest rate of the rates on the loans you consolidate, rounded up to the nearest one-eighth of 1%
Principal balance	Combines the principal balance of all consolidated loans, including any outstanding interest
Repayment term	Your repayment term may become longer, depending on your plan
Monthly payment	Your payment may decrease, especially if consolidation extends your repayment term
Total interest	A longer repayment term and capitalized interest can mean paying more interest over the life of the loan
Federal benefits	You may lose certain borrower benefits, such as loan cancellation, principal rebates, or interest rate discounts
Forgiveness	Consolidation can affect credit toward forgiveness programs, though some non-Direct loans may now qualify for income-driven repayment plans or the Public Service Loan Forgiveness (PSLF) program

Which Student Loans Can You Consolidate?

Most, but not all, federal loans qualify for federal consolidation. Private student loans are ineligible. You can’t consolidate Parent PLUS loans with the student’s federal loans, but parents can consolidate their own loans. But if you consolidate on or after July 1, 2026, you’ll only have access to the Tiered Standard plan, which isn’t eligible for Public Service Loan Forgiveness.

• Direct loans: Yes. You can consolidate eligible Direct Subsidized, Direct Unsubsidized, PLUS, and other Direct loans.

• FFEL loans: Yes. Consolidating into a Direct Consolidation Loan can give you access to federal benefits such as the Public Service Loan Forgiveness (PSLF) program and additional repayment plans.^[3]

• Perkins loans: Yes. But consider any Perkins-specific cancellation benefits you may lose before consolidating.^[4]

• Parent PLUS loans: Yes. But parents may lose access to certain repayment plans for their own education loans when consolidating with a Parent PLUS loan. You also lose access to PSLF if you consolidate.

• HEAL loans: Yes. Health Education Assistance Loans and Health Professions Student Loans are eligible for consolidation.

• Defaulted federal loans: Yes. But you must meet additional requirements to qualify.

• Private student loans: Not eligible.

Can you consolidate student loans in default?

Yes, you can usually consolidate defaulted federal loans into a Direct Consolidation Loan. You must either make three consecutive monthly payments on existing loans or agree to an IDR plan when consolidating. The loans also must not have an active judgment or wage garnishment order.

Consolidation can help you out of default, but the default record and missed payments may remain on your credit history.^[5]

Can you consolidate student loans more than once?

Not usually. But you can if you only include at least one additional eligible federal loan to consolidate again. But if you have a single existing FFEL Consolidation Loan, you may be able to reconsolidate to:

• Get out of default

• Qualify for the PSLF program

• Become eligible to use your no accrual of interest benefit if you’re an active-duty service member

Consolidation vs. Refinancing: What’s the Difference?

Federal consolidation is for federal student loans only, though you can refinance both private and federal loans. Refinancing replaces your existing loans with a new loan from a private lender. If you refinance federal loans, you give up federal protections and benefits, such as IDR and PSLF.^[6]

Consolidation simplifies your payments, but it may not lower your monthly payments or guarantee interest savings. Student loan refinancing can lower your interest rate, but that depends on your credit score. You also permanently lose federal benefits when you refinance federal loans.

Let’s take a look at the differences between federal consolidation and private refinancing.

Feature	Federal Consolidation	Private Refinancing
Who offers it	The U.S. Department of Education	Private lenders
Eligible loan types	Most federal student loans	Private and federal student loans
How it affects interest rates	Uses a fixed weighted average interest rate of all consolidated federal loans	May give you a higher or lower fixed or variable interest rate depending on your credit history
Keeps federal benefits?	Depends on loan type	No
Requires credit check?	No	Yes
Best for	Simplifying repayment or accessing certain federal repayment options	Borrowers with strong credit or who want different loan terms and are OK with losing federal benefits

How to Consolidate Private Student Loans Through Refinancing

Private student loan consolidation isn’t an option through the federal consolidation program. Instead, you’ll need to refinance through a private lender.

Consider the following:

1. Compare lenders and rates to find refinancing options that fit your needs.

2. Prequalify to review potential rates and terms without affecting your credit score.

3. Consider a cosigner if you can’t qualify for the best rates and terms on your own.

4. Gather documentation, such as proof of income, loan statements, and identification.

5. Submit an application to the lender that offers the best deal.

6. Accept the new loan if approved, and keep making payments until your new lender pays off your old loans.

7. Repay the new loan under its new interest rate, term, and monthly payment.

Private lenders typically consider your credit history, income, degree completion, employment, and debt-to-income (DTI) ratio when evaluating applications.

But remember that if you refinance federal student loans into a private loan, you can lose federal benefits and protections, including deferment, forbearance, IDR plans, and forgiveness programs.

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Pros and Cons of Consolidating Student Loans

Consolidating federal student loans can simplify repayment by combining multiple loans into one, but it may also affect your repayment terms and costs. Whether consolidation makes sense depends on your loans, goals, and eligibility.

How Consolidation Affects Student Loan Forgiveness

Consolidating federal student loans can affect forgiveness eligibility and how the U.S. Department of Education counts prior qualifying payments.

Only Direct loans qualify for PSLF. If you have FFEL or Perkins loans, you can consolidate them into a Direct Consolidation Loan to become eligible. PSLF typically requires 120 qualifying monthly payments while working for a qualifying employer.

Qualifying PSLF payments made before consolidation can count toward forgiveness on your new Direct Consolidation Loan. The U.S. Department of Education generally calculates your credits toward payments using a weighted average of the qualifying monthly payments from your consolidated loans rather than giving you full credit for each payment.^[7]

Borrowers who consolidated before June 30, 2024, received a one-time special exception adjustment to their IDR account. Qualifying IDR and PSLF payments made before consolidation could receive full credit under the adjustment. Current IDR forgiveness requires 240 or 300 months (20 or 25 years) of payments, depending on the repayment plan.

But keep in mind that if you consolidate now, you won’t have access to legacy IDR plans. Your loan’s only eligible for the Repayment Assistance Plan (RAP), which requires 30 years of payments before forgiveness, or the Tiered Standard plan.^[8]

Should You Consolidate Your Student Loans?

A federal consolidation loan may make sense if it simplifies federal loan repayment or gives you access to a repayment plan or forgiveness pathway you otherwise couldn’t use. But it isn’t for everyone.

Consider consolidation if …

• You want one federal loan and one monthly payment.

• You have eligible federal loans and want access to a particular repayment or forgiveness program.

• The loans you’re consolidating aren’t already in an IDR plan or forgiveness program.

Consider refinancing if …

• You have high-interest or variable-rate private loans.

• You have strong credit and income, or a cosigner, to qualify for better repayment terms.

• You have federal student loans and are willing to lose federal benefits and protections.

Consider neither if …

• Your current federal repayment plan already works for your budget.

• Consolidation would cause you to lose benefits you value.

• Refinancing would give up federal protections without a meaningful financial benefit.

Alternatives to Consolidating Student Loans

You have several options for managing student loan debt without consolidating. The right alternative depends on your loan types, income, eligibility, and repayment goals.

• Income-driven repayment plans: Servicers base payments on your income and the number of dependents you have. But you must recertify every year, and your payments will increase if your income does.^[9]

• Forgiveness programs: IDR and PSLF forgiveness can eliminate qualifying remaining balances. But you’ll need to meet specific employment or repayment plan requirements.

• Refinancing: You may qualify for better repayment terms by refinancing with a private lender. But it requires a credit check, and you’ll lose federal loan benefits and protections.

How to Consolidate Student Loans FAQs