How to Consolidate Student Loans

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Consolidating student loans can make educational debt easier to manage. Instead of having to handle payments for a series of student loans, you'll have one single monthly payment that covers everything. Only federal student loans are eligible for consolidation. The interest rate is fixed for the life of the loan and based on the weighted average of the interest rates of each loan being consolidated.


Determine Eligibility

You generally can consolidate student loans after you graduate, leave school or drop below the half-time level. At least one Federal Direct Loan or Federal Family Education Loan has to be in either the grace period or repayment process. If you want to consolidate a loan that's in default, you have to either make satisfactory repayment arrangements with your lender or agree to repay it under one of the Department of Education's payment plans that tie payments to your income level.


Get Application and PIN

Apply for a consolidated student loan at You'll need your Federal Student Aid personal identification number, or PIN, in addition to your personal information. If you don't already have a PIN, request one online at Once you're signed in, you can complete the Federal Direct Consolidation Loan Application and sign the promissory note. Or you can print out a paper application and mail the forms in if you choose. You'll generally mail the paperwork to whichever loan servicer you select. Addresses for each can be found at


Select Your Servicer

When filling out the application, you'll choose the loans you want to consolidate. In addition, if you have loans you don't want to consolidate, you'll list those separately. They won't be included in the consolidation, but the amounts can then be considered when determining the maximum repayment period. You'll then pick the loan servicer you want to handle the consolidation from among the options provided by the Department of Education. As of publication, the Department of Education has four consolidation servicers: FedLoan Servicing, Navient, Nelnet and Great Lakes Educational Loan Services Inc.


Pick a Payment Option

Select your payment plan; these generally offer the opportunity to pay off the loans in terms ranging from 10 to 30 years. Read the terms and conditions, then confirm the borrower and reference information. Once that's done, review and sign the documents. There are no application fees for a direct consolidation loan and no prepayment penalty.

Complete the Process

Once you finish your application, the loan servicer will complete the process. In the meantime, keep making your current loan payments until you receive confirmation that the consolidation has taken effect. As far as student loans go, what has been consolidated cannot then be torn asunder. Loans are paid off and replaced by the consolidated loan, so they no longer exist. While private lenders may be happy to take on your federal loans, this is rarely is a good idea for you, as you'll lose the rights and benefits you have with the individual loans before the process and with the consolidated loan afterward.