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Federal Direct Consolidation FACT SHEET

Pros & Cons to Implementing a

Federal Direct Consolidation Loan:

A Direct Consolidation Loan allows you to consolidate (combine) multiple federal education loans into one loan. The result is a single monthly payment instead of multiple payments. Loan consolidation can also give you access to additional loan repayment plans and forgiveness programs. Speak to a Certified Student Loan Professional™ to see if a Direct Consolidation is right for your student loan plan.


  • 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.

  • Consolidation can lower your monthly payment by giving you a longer period of time (up to 30 years) to repay your loans.

  • If you consolidate loans other than Direct Loans, such as FFEL, Perkins, & HRSA loans, it may give you access to additional income-driven repayment plan options and Public Service Loan Forgiveness.

  • Parent PLUS loans can qualify for ICR (Income-Contingent Repayment).

  • You’ll be able to switch any variable-rate loans you have to a fixed interest rate: the new fixed interest rate will be calculated by taking the average of all consolidated interest rates, rounded up to the nearest 1/8th of a percent.


  • Because consolidation usually increases the period of time you to have to repay your loans, you might make more payments and pay more in interest than would be the case if you don’t consolidate.

  • Consolidation may also cause you to lose certain borrower benefits—such as interest subsidies or some loan cancellation benefits—that are associated with your current loans.

  • If you’re paying your current loans under an income-driven repayment plan, or if you’ve made qualifying payments toward Loan Forgiveness, consolidating your current loans will cause you to lose credit for any payments made toward income-driven repayment plan forgiveness or Public Service Loan Forgiveness.

  • Interest is capitalized (accrued interest is added to principal).

  • Can no longer use a “snowball” pay-down approach.

  • No do-overs/not reversible once accepted.

Meagan Landress, CSLP®

Certified Student Loan Professional™

Financial Coach Meagan

MRLandress, Inc.


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