Loan Consolidation Information for Federal Student Loan Borrowers

STOP! To successfully research repayment options (such as loan consolidation) borrowers should prepare themselves by accessing their current loan information first:

Find Out What Kinds Of Loans You Have

Use the National Student Loan Data System (NSLDS) to determine your federal loan types and lender information.

You will need to compile the following information through the NSLDS database, and/or contacting your lender(s):

A copy of your Promissory Note for each loan (review the loan benefits for each loan);
Lender address and contact phone per loan;
Interest rate per loan;
Amount due per loan; and
Account number per loan.

Important: Only federal student loans can be included in a federal loan consolidation. Cal Poly Institutional loans, Robert Noyce Scholarships/Stipends, and/or alternative loans lent through a bank cannot be included in a federal consolidation loan. There are no exceptions to this.

What Is A Federal Consolidation Loan?

A federal consolidation loan is a loan used to pay off existing federal student loans. It is a way to extend a repayment period for up to 30 years (depending on indebtedness) - resulting in lower monthly payments and a fixed interest rate.

Federal student loan borrowers looking into consolidation should consider the following:

Federal Perkins loans cannot be consolidated unless another federal loan type is included. Ask the Consolidation Loan lender for details.
Borrowers who extend their repayment period to secure lower monthly payments will pay more in interest over the life of the loan.
Borrowers attempting to consolidate their federal loans during a grace period (defined as the period of time between dropping below half-time enrollment and the first payment coming due) should ask the consolidation lender if doing so will ensure a lower consolidation loan interest rate.
Borrowers should ask the consolidation loan lender to summarize which of the federal Stafford and/or federal Perkins loan cancellation benefits will be forfeited upon consolidating. Important: The federal Perkins loan program has a series of cancellation benefits that a borrower should review before consolidating.
Borrowers in default (due to non-payment) may consolidate their defaulted loan(s) if he/she signs up for the Income Sensitive Repayment Plan during the application process. Other requirements may apply.