Loan Consolidation is the process of combining multiple student or parent loans into one new loan with a new repayment term, interest rate and monthly payment.

FFELP Consolidation Loan

In the Family Federal Education Loan Program (FFELP), borrowers attain federally-guaranteed student loans through a private bank.

***We currently do not know of private lenders offering consolidation for federal loans. If you are interested in consolidating your federal loans with the federal government, please review the information below.***

Direct Consolidation Loan

Benefits of Direct Consolidation Loan:
  • One lender (U.S. Dept of Education) and one monthly payment (easier to manage debt)

  • Consolidation is free

  • No minimum amount is required to qualify

  • Reduced monthly payments

Who is eligible for a Direct Consolidation Loan?
  • Borrowers must have at least one Direct or FFEL Loan that is in grace, repayment, deferment or default status. Loans in an in-school status cannot be consolidated.

Borrowers who do not have Direct Loans may be eligible for a Direct Consolidation Loan if:
  • They include at least one FFEL Loan and have been unable to obtain a federal consolidation loan with a FFEL consolidation lender OR

  • Have been unable to obtain a federal consolidation loan with income-sensitive repayment terms acceptable to them OR

  • Intend to apply for loan forgiveness under the Public Service Loan Forgiveness Program

There are three forms to complete:
  1. Direct Consolidation Loan Application

  2. Direct Consolidation Loan Promissory Note

  3. Repayment Plan Selection Form

**These forms can be completed online at

Six Steps to calculate the interest rate of a Direct Consolidation Loan:
  • Multiply each loan by its interest rate to determine the "per loan weight factor"

  • Add the "per loan weight factors" together

  • Add the loan amounts together

  • Divide the "total per loan weight factor" by the "total loan amount" and then multiply by 100

     Total per loan weight factor    X   100  = Weighted Average Rate

           Total Loan Amoun

  • Round the result of Step 4 to the nearest higher 1/8th of one percent if it is not already on an eighth of a percent.   

  • Compare the result of Step 5 with the interest rate cap of 8.25%. The fixed interest rate on the Direct Consolidation Loan will be the lower of the two                   OR, you may use the calculator below:

Loan Consolidation Calculator:

For Additional Information about Direct Consolidation Loans:

Web -

Phone - 1(800)557-7392 [8am-8pm, Mon-Fri]

Mail - U.S. Department of Education

            Consolidation Department

            P.O. Box 242800

            Louisville, KY 40224-2800

Back to Top