Can I Consolidate Student Loans While Still in School?

Current college students can’t consolidate their federal student loans while they’re still in school.

Consolidation involves combining all of your loans into one single loan through the U.S. Department of Education. It’s a strategic move that will make payments simpler, but you won’t get a lower interest rate. However, it could lower your monthly payment by extending the repayment term.

The earliest point that you can consolidate your federal student loans is when you enter into your grace period, the six-month interval prior to repayment that’s triggered when you graduate, leave school for any other reason or drop below half-time enrollment.

You can also consolidate at any point during your repayment.

Parents, however, can consolidate parent PLUS loans at any time, including while their student is still in school.

Consider making interest payments in school

What you can do while in school is make interest payments on your debt.

While you’re in school, interest grows daily on the amount you borrowed. When you start repaying the debt, the accrued interest amount capitalizes, which means it’s added to the total amount you owe.

By making interest payments while you're in school, you can lower the total balance you’ll need to pay off when you leave.

When can I refinance my student loans?

Refinancing, unlike consolidation, is done through private lenders, combining existing student loans into one new one at a lower rate.

Most lenders require a bachelor’s degree to qualify, as well as credit scores at least in the high 600s and stable finances that allow you to pay all of your debts. Some approve borrowers approaching graduation or those who have left school without earning a degree.

You can refinance both federal and private loans, but consider holding off on refinancing federal student loans since you'll lose out on opportunities for forgiveness and income-driven repayment.