Loan consolidation is a method of refinancing federal educational loans. In a loan consolidation, the loans included in consolidation are repaid in full with a new loan. The new loan is then payable according to the terms of the new loan, generally with a longer repayment period. There are two programs you can use to consolidate your loansę”ederal Direct Loan Consolidation (provided by the federal government) or Federal Loan Consolidation (through various private banks and lenders). Each program has advantages and disadvantages to you depending on your particular situation. The chart below compares these two programs to help you decide which route is the best for you.
Federal student loans that may be included in loan consolidation are:
Federal Stafford Loans Guaranteed Student Loans Federal Insured Student Loans (FISL) Direct Subsidized Loans Direct Subsidized Consolidation Loans Federal Perkins Loans National Direct Student Loans (NDSL) National Defense Student Loans (NDSL) Federal PLUS Loans Parent Loans for Undergraduate Students (PLUS) Direct PLUS Loans Direct PLUS Consolidation Loans | Federal Unsubsidized Stafford Loans Federal Supplemental Loans for Students (SLS) Federal Consolidation Loans Direct Unsubsidized Loans Direct Unsubsidized Consolidation Loans Auxiliary Loans to Assist Students (ALAS) Health Professions Student Loans (HPSL) and Loans for Disadvantaged Students (LDS) made under subpart II of part A of title VII of the Public Health Service Act. Health Education Assistance Loans (HEAL)* Nursing loans made under subpart II of part B of title VIII of the Public Health Service Act |
*Note: HEALs can be refinanced without consolidation through HEAL refinancing to retain all HEAL benefits.
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