Consolidating your student loans
College students can take out new loans each year they’re in school, so by the time graduation comes, it’s common to have half a dozen, or more, individual loans.
Each of them may have different terms, including interest rates.
Under the Direct Loan Consolidation Program, you can consolidate Subsidized and Unsubsidized Stafford Loans, Supplemental Loans for Students (SLSs), Federally Insured Student Loans (FISLs), PLUS Loans, Direct Loans, Perkins Loans, Health Education Assistance Loans (HEALs), and just about any other type of federal student loan.
Loans that are not eligible for consolidation include state or private loans that are not federally guaranteed.
Consolidation also opens up the door to extended repayment plans, in which your term can stretch up to 30 years depending on how much debt you have.
Consolidation doesn’t always work to your benefit, however.
It can also be a way to get into repayment plans you otherwise wouldn’t be eligible for.
Borrowers who graduated before 2010, when the government shifted to Direct Loans, for example, need to consolidate their loans to access the latest income-driven plan, Revised Pay As You Earn.