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How to Consolidate Your Student Loans
You can consolidate multiple federal student loans into a single, new federal loan on studentaid.gov. To consolidate (or refinance) private student loans, go directly to a private lender.
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Updated · 1 min read
How is this page expert verified?
NerdWallet's content is fact-checked for accuracy, timeliness and relevance. It undergoes a thorough review process involving writers and editors to ensure the information is as clear and complete as possible.
Laura McMullen assigns and edits content related to personal loans and student loans. She previously edited money news content. Before then, Laura was a senior writer at NerdWallet and covered saving, making and budgeting money; she also contributed to the "Millennial Money" column for The Associated Press. Before joining NerdWallet in 2015, Laura worked for U.S. News & World Report, where she wrote and edited content related to careers, wellness and education and also contributed to the company's rankings projects. Before working at U.S. News & World Report, Laura interned at Vice Media and studied journalism, history and Arabic at Ohio University. Laura lives in Washington, D.C.
Julie Myhre-Nunes leads the Home Services team, covering home improvement, home warranties, home security, solar and moving. She also leads Auto Loans and Student Loans. Julie has over a decade of experience in personal finance. Before joining NerdWallet, she led editorial teams at Red Ventures and several startups. Her personal finance insights have been featured in Forbes, The Boston Globe and CNBC, while her writing has appeared in USA Today, Business Insider, Wired Insights and more.
Trea S. Branch is a former NerdWallet writer focused on student loan refinancing. She holds a degree in economics from the University of Michigan and a degree in business from the University of Notre Dame. Trea shared her own student loan payoff journey through a blog, which turned into a personal finance coaching business. Her goal has been to empower anyone overwhelmed by student debt.
Lead Writer
Student loan consolidation combines multiple federal student loans into a single, new federal loan. This can simplify your payments, lower your monthly bill and lengthen your repayment term.
The easiest way to consolidate your student loans is on studentaid.gov.
Alternatively, you can convert multiple federal or private loans for one, new private student loan — ideally at a lower interest rate. This consolidation process is called a student loan refinance.
If you’re thinking about consolidating your student loans, here’s what you need to know.
When can I consolidate my student loans?
You can typically consolidate federal student loans once you graduate, leave school or drop below half-time enrollment. You cannot consolidate while you're still in school. There is no credit requirement, but there is also no chance of a lower interest rate.
Consider federal student loan consolidation if you:
Want a single monthly federal student loan payment, but don’t need it to be drastically lower.
Want to change your student loan servicer.
Note that consolidation can potentially impact your loan forgiveness eligibility, particularly if you have specific loan types.
Before consolidating, reach out to your servicer to confirm that you won’t lose any loan forgiveness benefits that could help you.
DIVE DEEPER: What is student loan consolidation?
Here's what happens when you consolidate:
Your loans are replaced. When you consolidate federal loans, the government pays them off and replaces them with a new loan called a “direct consolidation loan.”
Your interest rate is recalculated. Your new fixed interest rate will be the weighted average of your previous rates, rounded up to the next one-eighth of 1%. So, for instance, if the weighted average comes to 6.2%, your new interest rate will be 6.25%.
Unpaid interest may capitalize. If you have unpaid interest, it can capitalize when you consolidate. That means the amount you owe in interest will be added to your principal balance. This can increase the amount you owe, since interest will build on a larger sum going forward.
(Check how much interest you’ve accrued by logging into your studentaid.gov account. On your main dashboard, your total debt owed will be broken down by principal and interest.)
Your repayment term changes. Your new loan term could range from 10 to 30 years, depending on your total student loan balance and the repayment plan you select. Repayment will typically start within 60 days of when your consolidation loan is first disbursed.
NerdWallet ratingNerdWallet's ratings are determined by our editorial team. The scoring formula for student loan products takes into account more than 50 data points across multiple categories, including repayment options, customer service, lender transparency, loan eligibility and underwriting criteria.
Fixed APR
3.73-9.99%
Actual rate will vary based on your financial profile. Fixed annual percentage rates (APR) range from 3.98% APR to 10.24% APR (3.73% - 9.99% with .25% auto pay discount). Variable annual percentage rates (APR) range from 6.13% APR to 10.24% APR (5.88% - 9.99% with .25% auto pay discount). Earnest variable interest rate student loan refinance loans are based on a publicly available index, the 30-day Average Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York. The variable rate is based on the rate published on the 25th day, or the next business day, of the preceding calendar month, rounded to the nearest hundredth of a percent. The rate will not increase more than once a month, but there is no limit on the amount that the rate could increase at one time. Please note, we are not able to offer variable rate loans in AK, IL, MN, NH, OH, TN, and TX. Our lowest rates are only available for our most credit qualified borrowers and require selection of our shortest term offered (5 years) and enrollment in our .25% auto pay discount from a checking or savings account. Enrolling in autopay is not required as a condition for approval.
Variable APR
5.88-9.99%
Actual rate will vary based on your financial profile. Fixed annual percentage rates (APR) range from 3.98% APR to 10.24% APR (3.73% - 9.99% with .25% auto pay discount). Variable annual percentage rates (APR) range from 6.13% APR to 10.24% APR (5.88% - 9.99% with .25% auto pay discount). Earnest variable interest rate student loan refinance loans are based on a publicly available index, the 30-day Average Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York. The variable rate is based on the rate published on the 25th day, or the next business day, of the preceding calendar month, rounded to the nearest hundredth of a percent. The rate will not increase more than once a month, but there is no limit on the amount that the rate could increase at one time. Please note, we are not able to offer variable rate loans in AK, IL, MN, NH, OH, TN, and TX. Our lowest rates are only available for our most credit qualified borrowers and require selection of our shortest term offered (5 years) and enrollment in our .25% auto pay discount from a checking or savings account. Enrolling in autopay is not required as a condition for approval.
NerdWallet ratingNerdWallet's ratings are determined by our editorial team. The scoring formula for student loan products takes into account more than 50 data points across multiple categories, including repayment options, customer service, lender transparency, loan eligibility and underwriting criteria.
1. Log in to studentaid.gov. From there,access the online direct consolidation loan application. The Education Department “highly recommends” applying online, but you can find instructions to submit a paper application in the FAQ of the online application.
2. Gather your information. You’ll need to finish the application in one session, which typically takes up to 30 minutes. So gather the documents listed in the “What do I need?” section of the application before you start.
You’ll also be asked to supply two references, including one close family member. Collect the names, phone numbers and permanent addresses to submit. (The Education Department only uses these references if it is unable to contact you directly; your references are never responsible for repaying your loan.)
3. Make your decisions. The application will ask you:
Which loans you’d like to consolidate. (You don’t have to consolidate all of them.)
Which of the income-driven repayment plans you want to sign up for.
4. Reach out for help. Contact your current servicer if you have any questions, or contact the Federal Student Aid Information Center (FSAIC) at 1-800-433-3243.
🤓Nerdy Tip
Consolidating your federal loans through the Department of Education is free. Steer clear of companies that charge fees to consolidate them for you.
Frequently asked questions
Should I consolidate my student loans?
You should consolidate your federal loans if you want to make a single monthly payment or need to consolidate to qualify for programs like Public Service Loan Forgiveness. If you want to save money by lowering your interest rate, consider private loan consolidation — also known as refinancing.
Can I consolidate student loans while still in school?
If your student loans are in default, consolidation is typically one of a few methods to get your loans back on track. To consolidate defaulted loans you'll need to make three full, on-time consecutive monthly payments on the defaulted loan or agree to enroll in an income-driven repayment plan.
What's the difference between consolidating and refinancing?
No, you cannot consolidate your federal student loans while you’re in school. You’re generally eligible for federal student loan consolidation once you graduate, leave school or drop below half-time enrollment. If you want to refinance private student loans while in school, your options will vary by lender.
Should I consolidate my student loans?
You should consolidate your federal loans if you want to make a single monthly payment or need to consolidate to qualify for programs like Public Service Loan Forgiveness. If you want to save money by lowering your interest rate, consider private loan consolidation — also known as refinancing.
, consolidation is typically one of a few methods to get your loans back on track. To consolidate defaulted loans you'll need to make three full, on-time consecutive monthly payments on the defaulted loan or agree to enroll in an income-driven repayment plan.
What's the difference between consolidating and refinancing?
No, you cannot consolidate your federal student loans while you’re in school. You’re generally eligible for federal student loan consolidation once you graduate, leave school or drop below half-time enrollment. If you want to refinance private student loans while in school, your options will vary by lender.
Want to pay less for your student loans?
See if you pre-qualify for refinancing and compare real rates — not just ranges or estimates.
