Federal Direct Loan Program (FDLP)

Consolidation Loans

If you have several federal student loans, you may be able to combine — or consolidate — them into one loan. You may consider this option in order to:

• Lower your monthly payment amount by extending the repayment period,
• Lock in a fixed interest rate for the entire repayment period of the loan, and/or
• Combine multiple loan balances under a single loan holder — the Department of Education (ED) — so that you have to make only one monthly payment.

Remember, however, that you are not required to consolidate your federal student loans. Consolidation is a decision that you should not take lightly. Because consolidation is often a one-time decision, you'll want to learn as much as possible before deciding. TG offers you a resource for exploring your consolidation options, provides an overview of the consolidation process, and answers common questions about consolidation.

Until recently, a borrower could consolidate his or her loans under either the Federal Family Education Loan Program (FFELP) or the Federal Direct Loan Program (FDLP). However, recent legislation has amended the law that governs federal student loans. Specifically, the Health Care and Education Reconciliation Act of 2010 requires that no new loans may be made under the FFELP; any Stafford, PLUS, or Consolidation loan first disbursed on or after July 1, 2010, must be made under the FDLP. Contact the Direct Loan Servicing Center for more information about obtaining a Direct Consolidation loan under the FDLP.

FFELP loans first disbursed before July 1, 2010, retain the terms and conditions of the promissory note — including repayment options, deferment, forbearance, and discharge and forgiveness programs, if applicable — for the life of the loan.

If you have already obtained a FFELP Consolidation loan, see Frequently Asked Questions for additional information.