Do you have multiple federal loans from multiple lenders? Are you finding it difficult to keep track of all your lenders and make payments to multiple entities? Are your monthly payments for your federal student loans too expensive for your budget? If you answer yes to at least one of these questions, then you may want to consider federal loan consolidation.
Consolidation is the process of obtaining a new federal loan that pays off your existing federal loan holder or holders. The repayment term can be extended up to 30 years with additional loan repayment options and additional cancellation options for certain types of employment. Consolidation can have some disadvantages. For example, you may lose cancellation eligibility on the Perkins Loan if you consolidate it. More information can be found at studentaid.ed.gov/sa/repay-loans/consolidation.
To apply for a consolidation loan, first gather all of your federal loan history from the National Student Loan Database System (www.nslds.ed.gov). Then, go to www.studentloans.gov and download an application or apply directly online. Applications can take a few months to process, so continue to make payments to your lender until you have received notification that the new consolidation loan has been processed.