When you consolidate your Federal student loans, you go through the Direct Consolidation Loan program.
This program is designed specifically for Federal student loans and is administered by the Department of Education.
According to Student Aid.gov, the following types of student loans are eligible for consolidation: • Direct Subsidized Loans • Direct Unsubsidized Loans • Subsidized Federal Stafford Loans • Unsubsidized Federal Stafford Loans • Direct PLUS Loans • PLUS Loans from the FFEL Program • Supplemental Loans for Students (SLS) • Federal Perkins Loans • Federal Nursing Loans • Health Education Assistance Loans • Some previous consolidation loans When you consolidate your Federal student loans, you will get a new loan through the Department of Education, which you can then setup a repayment plan that works for you.
The interest rate will also be fixed at the current Federal Direct loan rate.
You are eligible for any “Direct” repayment plan – and you can setup a timeline from 10 to 30 years to pay back the loan.
This is one of the best ways to lower your current payment on your Federal student loans.
Think about it: you just graduated from college and you have a combination of about five different student loans. However, there are times when combining all of your loans (both Federal and private) makes sense, and there are times when it may not.
The benefits of refinancing your private student loans are typically two-fold.
Having multiple loans can be tough to manage – different amounts due, different payment due dates, and a lot more statements to keep track of.
By combining your loans into a single loan, you can have one single bill, and you may even be able to lower your payments.
Three of them are Federal student loans and two of them are private. Here is what you need to know about consolidating and refinancing your Federal and private student loans together.
Consolidating multiple loans into one single loan can really help borrowers who prefer to have a simple, single payment for their student loans.