Loan Consolidation Information
What is a Federal Consolidation Loan?
A Federal Consolidation Loan is a loan that you can use to pay off all or a portion of your original eligible federal student loans. You combine (consolidate) your existing federal student loan debt into one new loan.
What are the terms of a Federal Consolidation Loan?
- The interest rate on a Federal Consolidation Loan is fixed, meaning it will not change over the life of the loan, even if the interest rates on other federal loans go up (or down).
- The interest rate is calculated from the weighted average of the interest rates of your existing loans, rounded up to the nearest one-eighth of 1% and there is no interest rate cap.
- There are no fees to apply for or receive a Federal Consolidation Loan.
- The repayment term is up to 30 years, depending on the total amount of your student loan debt, and there is no pre-payment penalty.
Why should you consider consolidation?
With a Federal Consolidation Loan, you can benefit from:
- Lower monthly payments
- Fixed interest rates
- Only one payment for your federal loans each month
- New or renewed deferments
Because you are allowed up to 30 years to repay your loan, your monthly payment can be significantly lower with a consolidation loan, although you may pay more in total interest over the life of your loan.
When should you consolidate?
There are no deadlines. Only loans that are in grace, deferment, forbearance, or repayment can be consolidated into a Federal Consolidation Loan. Federal Stafford Loans that are in the grace period or in deferment may have the lower in-school interest rate, compared to loans that are in repayment or forbearance. This will depend on whether your loans have a fixed or variable interest rate structure.
What loans can be consolidated?
The following loans are eligible for federal student loan consolidation:
- Subsidized Federal Stafford Loan
- Unsubsidized Federal Stafford Loan
- Subsidized Federal Direct Loan
- Unsubsidized Federal Direct Loan
- Federal Perkins Loan*
- Health Professions Student Loan (HPSL)
- Nursing Student Loan (NSL)*
- Federally Insured Student Loan (FISL)
- Auxiliary Loan to Assist Students (ALAS)
- Federal Supplemental Loan for Students (SLS)
- National Direct Student Loan (NDSL)*
- Health Education Assistance Loan (HEAL)
- Federal PLUS Loan
- Loan for Disadvantaged Students (LDS)
* These loans may already have low, fixed interest rates and you should carefully consider whether to include them in a consolidation loan.
Additional information is available at: https://studentaid.ed.gov/repay-loans/consolidation. To apply for a consolidation loan, contact the U.S. Department of Education (Federal Direct Loan Program) at: www.studentloans.gov or (800) 557-7392.
For more information please contact:
The Office of Financial Aid
Quinnipiac University School of Law
275 Mount Carmel Avenue, LW-FIN
Hamden, CT 06518