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Education Consolidation Loans

What is Education Consolidation Loans Program?

Consolidation Loans are offered to most mortgagors of Federal education loans and originate from one of two sources:

Direct Consolidation Loans are made available by the U.S. Department of Education. You pay back a Federal Consolidation Loan to the U.S. Department of Education.

Federal Consolidation Loans are made available via the Federal Family Education Loan (FFEL) Program. While FFEL funds originate from private lenders, namely banks and credit unions, they are funded and aided by the U.S. Department of Education. You pay back a FFEL Consolidation Loan to the private lender that prepared the loan or to its designated agency.

Whether you obtain a Direct or FFEL Consolidation Loan is dependent on which program you select. In both cases the terms of the loan (loan amounts, interest rate, and other benefits) are usually the same.

Who is eligible for this program?

Majority of the Federal student loans are qualified for consolidation, including funded and non-funded Direct and Federal Family Education (FFEL) Stafford Loans, Direct and FFEL PLUS Loans (parent loans), Federal Perkins Loans, Federal Nursing Loans, and Health Education Assistance Loans. Private educational loans do not qualify.

You can obtain a FFEL Consolidation Loan during your grace period, once the repayment is due, or when the suspension or tolerance period is on. Direct Consolidation Loans are also offered even when you are in school. Debtors who are defaulting must meet certain conditions prior to consolidating their loans.

How to go about this program?

The following details will guide you to the following stages to apply for this benefit.

Loan Terms

Maximum Loan Amount:

Interest Rate:
weighted average interest rate on the loans being consolidated rounded to the nearest one-eighth of 1 percent must not go beyond 8.25 percent.Presently, the interest rate doesn’t change during the loan period. To know an estimate of your interest rate, use the Online Calculator at

Maximum Loan Length:
30 years

Frequency of Payments:
monthly or quarterly

Prepayment penalties:


How to apply for this program?

To apply for a Direct Consolidation Loan, get in touch with the Loan Origination Center's Consolidation Department at 1-800-557-7392. TTY users for the hearing impaired can dial 1-800-557-7395. Or,
you can check out

To apply for a FFEL Consolidation Loan, get in touch with the consolidation department of a participating FFEL lender for an application or further details.

Program Contact Information

For further details, check out: