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Quinnipiac University
A student studies outside Echlin Center where undergraduate admissions is housed

Types of Aid

Federal Consolidation Loan

Loan Repayment Option | U.S. Department of Education

A Federal Direct Consolidation Loan allows you to combine multiple federal loans into one loan. There is no cost in doing so. The consolidated loan will have a new fixed interest rate based on the average of the interest rates on the loans you are consolidating.

The application for Direct Consolidation is located under the Federal Student Aid website. During the application process, you can confirm the loans you choose to consolidate and agree to the consolidation through completion of a new Promissory Note.

Please note consolidation of Direct Parent PLUS Loans together with Direct Student Loans is not permissible under the federal consolidation process.

Visit studentaid.gov to get started
What are the terms of a Federal Consolidation Loan?

The interest rate on a Federal Consolidation Loan is fixed, meaning it will not change over the life of the loan, even if the interest rates on other federal loans go up (or down).

The interest rate is calculated from the weighted average of the interest rates of your existing loans, rounded up to the nearest one-eighth of 1% and there is no interest rate cap.

There are no fees to apply for or receive a Federal Consolidation Loan.

The repayment term is up to 30 years, depending on the total amount of your student loan debt, and there is no pre-payment penalty.

Why should you consider consolidation?

With a Federal Consolidation Loan, you can benefit from:

  • Lower monthly payments
  • Fixed interest rates
  • Only one payment for your federal loans each month
  • New or renewed deferments

Because you are allowed up to 30 years to repay your loan, your monthly payment can be significantly lower with a consolidation loan, although you may pay more in total interest over the life of your loan.

When should you consolidate?

There are no deadlines. Only loans that are in grace, deferment, forbearance, or repayment can be consolidated into a Federal Consolidation Loan.

Federal Stafford Loans* that are in the grace period or in deferment may have the lower in-school interest rate, compared to loans that are in repayment or forbearance. This will depend on whether your loans have a fixed or variable interest rate structure. Because these loans may already have low, fixed interest rates and you should carefully consider whether to include them in a consolidation loan.

How to apply for consolidation

To apply for a consolidation loan, please review the resources and contact the U.S. Department of Education (Federal Direct Loan Program) by visiting www.studentaid.gov

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