Currently The Department of Education is not accepting new digital consolidation applications while it is reviewing the latest lawsuit against the SAVE plan. Paper applications will be accepted. If you would like to go ahead and submit a paper application, you can follow the steps in this article.
If you currently have federal student loans that are with different loan servicers, consolidation can greatly simplify loan repayment by giving you a single loan with just one monthly bill. There are a couple of other pros:
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Consolidation can lower your monthly payment by giving you up to 30 years to repay your loans.
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You’ll be able to switch any variable-rate loans you have to a fixed interest rate.
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If you consolidate loans other than Direct Loans, you may gain access to additional income-driven repayment plan options and Public Service Loan Forgiveness (PSLF). Direct Loans are from the William D. Ford Federal Direct Loan Program.
But consolidation has its cons, too:
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Because consolidation usually lengthens the repayment period, you will likely pay more interest over the long run. Any outstanding interest on the loans that you consolidate becomes part of the original principal balance on your consolidation loan, which means that interest may accrue on a higher principal balance than if you had not consolidated.
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Consolidation may cause you to lose borrower benefits such as interest rate discounts, principal rebates, or some loan cancellation benefits associated with your current loans.
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Consolidating your current loans may cause you to lose some credit for any payments made toward income-driven repayment plan forgiveness or Public Service Loan Forgiveness (if applicable). Your new consolidation will have a weighted average of qualifying payments. You can read more about how this works here.
Click Here for additional resources from the Department of Education website.