A direct consolidation loan allows you to consolidate (combine) one or more federal education loans into a new direct consolidation loan in order to reduce the amount of your monthly payment or have access to federal forgiveness programs. A direct consolidation loan allows you to consolidate several federal education loans into a single loan at no cost to you. View resources on coronavirus (COVID-19) on GovLoans, gov. Private education loans are not eligible.
A PLUS loan given to the parent of a dependent student cannot be transferred to the student through consolidation. Therefore, a student applying for loan consolidation cannot include the PLUS loan that their parents requested for the dependent student's education. A direct federal loan is a federal student loan granted directly by the U.S. UU.
Here are some tips and strategies for paying off your federal student loans, adapted to your situation. Searches are limited to 75 characters. We are the U.S. Consumer Financial Protection Office (CFPB).
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This information may include links or references to third-party resources or content. We do not endorse the third party or guarantee the accuracy of this third-party information. There may be other resources that meet your needs as well. Direct loan consolidation allows borrowers to apply for a new federal loan to pay off existing federal student loan balances.
This consolidation process converts many student loans into one with a single payment, which can make it easier to manage payments and even lower your monthly payment. The program may allow you to consolidate your federal loans into one and select the consolidation administrator of your choice. With your personal identifiers and your Federal Student Aid PIN, you can electronically complete the application for a direct federal consolidation loan and the promissory note. If you have strong credit, refinancing student loans with a private lender could help you get a lower interest rate and long-term savings on federal and private student loans.
Consolidating federal student loans with a direct consolidation loan is one way to simplify payments by combining many loans into one loan. The Department of Education made the historic decision to allow it to choose its consolidation management entity under the direct consolidation loan program.
Consolidation loan termscan last up to 30 years, depending on the repayment plan you choose, and the interest rate on your new loan will be the weighted average of the loans you consolidate, rounded to the eighth of the nearest 1%. By completing the free federal direct consolidation loan application and promissory note, you will confirm the loans you want to consolidate and agree to repay the new direct consolidation loan.
While student loan consolidation has its advantages, there are some disadvantages to consider, especially if you are a borrower who has already made income-based loan forgiveness payments. Just keep in mind that using a private loan to refinance federal student loans means that they will no longer qualify for federal benefits, such as deferment plans, forgiveness, and income-based payments. If you have multiple student loans, you can combine them into a single loan with a fixed interest rate based on the average interest rates of the loans that are being consolidated. Department of Education consolidation administrators will complete and manage your direct consolidation loan.
Before you decide to get direct loan consolidation, it's important to consider both the benefits and the drawbacks. The direct loan consolidation program is designed to simplify payments for federal loan borrowers and not to save you interest, as is the case with other types of consolidation loans, since there is no reduction in the interest rate. .