Bursar's Office

Under a Federal Student Loan Consolidation Loan, the new lender pays off your existing student loan accounts and incorporates all of your student loan debt into one account. If your financial difficulty is caused by the simple fact that your payments are just too high for your income, then a student loan consolidation may be in order.

Be cautious before entering a consolidation agreement. You should carefully compare the benefits available to you for your existing accounts with those that would be available to you after a consolidation. Make sure that you would not forfeit an entitlement that you expect to be able to use. For instance, if you qualify, or expect to qualify, for a partial cancellation of your Federal Perkins Loan, you would not want to include that loan in a consolidation. By doing so, you would lose your right to the cancellation and instead you would have to repay the loan in full.

You should be also be aware that if your repayment period is extended, paying a consolidation loan at the scheduled amount will be more expensive than if you paid your student loan accounts separately. This is because by extending the repayment period, you will incur additional interest costs. You can eliminate this effect by requesting a repayment term that is equal to the time remaining on your individual student loan amounts, or by repaying the consolidation within that period if you agree to the extended term.

For the most current information on loan consolidation, visit the Dept.of Education web site.