What is Federal student loan consolidation? This is a consolidation program designed to assist students and parents in simplifying their many types of federal student loans having all types of repayment schemes by merging them into a single loan.

When you consolidate federal student loans, in effect you get a new scheme of repayment as you now deal with a new loan. Student loan repayment will be just a single one every month. What’s more, the interest rate of the new debts will most probably lower than any of the interest rates of your previous government college loans. Even if you are in default, you can still be eligible for federal college loan consolidation provided specific requirements are satisfied.

The interest rate for federal student loan consolidation is fixed during the entire repayment period. By the way, how do they arrive at the interest rate of the new loan? This fixed interest rate is actually based on the average of the rates on the previous loans – rounded to the nearest 1/8 of a percent.

Who can consolidate federal student loans? If you have government funded debts, you can apply for consolidation once you started the repayment or during loan deferment or even forbearance.

You can enter all types of government debts under federal consolidation. It is best that you inquire from the loan advisor regarding the list of eligible federal loans. You can either have a subsidized or unsubsidized loan consolidation; this depends on the types of government debts that you wish to consolidate.