How to Consolidate a Federal Student Loan
Federal student loans are disbursed separately each year, meaning that graduating students usually have at least one loan for each year of school. Consolidating your federal student loans allows you to make only one monthly payment and potentially qualify for a longer repayment term than you would have without consolidating. The federal government manages Direct Consolidation Loans for students who have at least one federal Direct Loan or FFEL loan, which includes most Stafford, PLUS and Perkins loans.
- Difficulty:
- Moderate
Instructions
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1
Apply for a PIN from the Department of Education if you have never gotten one (see Resources). You might already have one from submitting the FAFSA online, in which case you can request a duplicate PIN through the Department of Education website if you forgot the number.
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2
Gather data on all of your student loan accounts, even if there are some that you do not want to consolidate. You will need your account numbers, the names and addresses of the loan holders and the approximate balance of each loan. Find this information on your billing statements or the lender's website.
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3
Navigate to the application on the Federal Direct Consolidation Loan website.
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4
Fill out your personal data in Section A. Enter "N/A" for any section that does not apply to you.
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5
Type the names and phone numbers of two references in Section B. These people must live in the United States, but not with you, and must have known you for at least three years.
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6
Type all of the requested loan information into Section C of the application. This section divides loans into those you want to consolidate and those you do not want to consolidate. You might not want to consolidate a loan because of borrower benefits or because it is not eligible, but the government will consider the amount when determining your repayment period.
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7
Select a repayment plan in Section D of the application. An income-based repayment plan sets the payment amount using your income from the previous year so the payments are affordable. A standard repayment plan could have higher payments, but it will also help you pay off the loan faster. You can change your repayment plan later, if desired.
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8
Read Section E and sign the promissory note in Section F with your name and PIN.
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1
Tips & Warnings
Your consolidation loan application will take 60 to 90 days to process. The government will notify you and provide repayment instructions when the loan is complete.
Do not stop making payments on your federal student loans until you have received confirmation that the consolidation process is complete. Missing payments during this time can hurt your credit score and delay your loan consolidation.
