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Consolidating federal student loans—Unsubsidized, Subsidized, Perkins, and/or 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. You can't consolidate loans with your spouse or your parents (including the PLUS loan). 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

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