☰ In This Section

Consolidating federal student loans-Unsubsidized, Subsidized, PLUS-may help you manage your debt with a fixed interest rate and a single monthly payment.

How It Works

With loan consolidation, you combine the federal loans belonging to you into a single loan at a fixed interest rate. That means you can't consolidate loans with your spouse. Also, you cannot consolidate private loans with your federal loans.

Your fixed interest rate is determined by taking a weighted average of your loan rates rounded up to the nearest 1/8 of 1%. There is no cap on the interest rate of a Direct Consolidation Loan.


  • 1 monthly payment
  • Longer repayment period
  • Possible lower monthly payments
  • Payment flexibility with deferment and forbearance options available
  • No credit checks (except PLUS loan consolidation may require credit check)
  • No fees or prepayment penalties
  • Fixed interest rate


  • Total cost is higher due to longer repayment period
  • Repayment begins immediately after consolidation
  • Possibility of higher interest rates
  • Could lose benefits such as subsidized interest, deferment, or loan forgiveness

More Information