Can You Consolidate Direct Student Loans?

If you have at least one direct student loan from the federal government, you can consolidate your loans into a single loan with just one monthly payment through a federal direct consolidation loan. This consolidation can help you lower your monthly payment and lock in a fixed interest rate for the duration of the loan.

Qualifying Loans

Direct student loans are issued from the federal government to students who apply and qualify. The main types of direct student loans are Stafford loans and PLUS loans. However, students also can consolidate other types of federal student loans, including Perkins loans and Stafford and PLUS loans disbursed through the Federal Family Education Loan program. You cannot consolidate student loans from private lenders with your federal student loans through the direct consolidation loan program. Unless you apply between July 1, 2010 and July 1, 2011, you cannot include loans with an in-school status with your direct consolidation loan.

Benefits

One of the major benefits of consolidating your student loans is that you rearrange them into just one loan with one monthly payment. You also can choose a repayment period of up to 30 years, which stretches out your payments over a longer time and makes each payment a smaller amount. However, a longer repayment period will cause you to pay more total interest. In general, a direct consolidation loan does not lower your interest rate because it is a weighted average of your existing rates, but if you have a loan with a variable interest rate, consolidating allows you to lock in that rate.

How to Consolidate

Apply for a consolidation loan by filling out the application on the federal direct consolidation loan website or printing the application, filling it out and mailing it in. If all of your loans that you want to consolidate are direct loans, you can apply over the phone by calling 800-557-7392. Continue making payments on all of your loans as scheduled until you have received confirmation of your consolidation loan.

Multiple Consolidations

You can consolidate your loans more than once, as long as you add at least one new loan to the consolidation loan each time. For example, if you already have a direct consolidation loan and you go back to school and get a direct Stafford loan, you can consolidate these loans together after you finish your schooling.