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Federal Direct Consolidation Loan

Federal direct consolidation provides you (or your parents, if they have a PLUS loan) with a simpler way to repay your student loans, especially if you have a combination of loans, such as Perkins Loans, FFELP Loans, and direct loans. With a direct consolidation loan, all your existing loans will be paid off, replaced by one new loan with a single interest rate and repayment period.

You will have to make just one payment a month for all the loans you consolidate. Even if you took out only one student loan, you may want to convert it to a direct consolidation loan to get the benefits of refinancing, such as a more favorable interest rate, flexible repayment options, or additional deferment possibilities. As with all other direct loans, your direct consolidation loan will be managed and collected by the U.S. Department of Education.

Consolidated Loan Q&A

What kinds of loans can be consolidated?

When should I consolidate my loans?
What is the interest rate?
What are the benefits of consolidation?

What kinds of loans can be consolidated?

Most federal student loans or PLUS loans can be consolidated. Loans eligible for consolidation include FFELP Stafford (subsidized and unsubsidized) and PLUS Loans, Federal Perkins Loans, all federal direct loans, and other loans such as Federal SLS, ALAS, HEAL, and Health Professions Student Loans. You may also be able to combine previously consolidated loans with one or more additional loans. You (or your parents) may apply for three types of direct consolidation loans:

1. Direct subsidized consolidation loan--combines federal student loans eligible for interest subsidies, such as subsidized FFELP and direct loans, and Federal Perkins Loans.
Direct unsubsidized consolidation loan--combines federal student loans not eligible for interest subsidies. If any one of the loans to be consolidated is unsubsidized, then you will receive a direct unsubsidized consolidation loan.
Direct PLUS consolidation loan--combines FFELP PLUS and Direct PLUS loans.


When should I consolidate my loans?

You may apply for a direct consolidation loan during your grace period or once you have entered repayment. When and if you decide to consolidate your loans will depend on your individual circumstances and your previous borrowing history. If you are considering consolidation, you should discuss your particular situation with a financial aid counselor, or log on to the Direct Loan Consolidation Information Center for more information or an application.


What is the interest rate on a direct consolidation loan?

The interest on direct subsidized and unsubsidized consolidation loans is a fixed rate derived from the weighted average of the interest rates of the loans being consolidated. The interest rates for subsidized and unsubsidized consolidation loans cannot exceed 8.25%. The interest rate for a direct PLUS consolidation loan cannot exceed 9%.


What are the benefits of consolidation?

If you have borrowed more than one loan, you will simplify the repayment process with a direct consolidation loan. Instead of making monthly payments for each loan separately, you will have to make only one payment every month. This single payment is likely to be a lower amount than the combination of minimum payments required for each separate loan.

The new interest rate on your direct consolidation loan may also be lower than what you are currently paying on one or more of your loans.

You will have more flexibility in repayment because all the direct loan repayment options discussed in the section on direct subsidized loans are available to direct consolidation loan borrowers (except that parent borrowers cannot repay direct PLUS consolidation loans using the income contingent repayment plan). You also gain the deferment, forbearance, and cancellation possibilities available to direct loan borrowers.

You may include a defaulted student loan as part of a direct consolidation loan if you have made satisfactory repayment arrangements for three months before consolidation or if you otherwise agree to repay your loan under the income contingent repayment plan. Incidentally, this is a way of removing your loan from default and restoring your eligibility for other types of federal financial aid.

You may not include as part of a direct consolidation loan any educational loan upon which there is a judgment or garnishment unless the judgment is vacated. You may obtain additional information on loan consolidation and an application at the Federal Consolidation Loan Information Center.



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Phone: 718-997-5102
Fax: 718-997-5122 

Assistance with the aid process is available in the One Stop Service Center in the Dining Hall. For more on the One Stop, visit

College Codes
FAFSA College Code - 002690
TAP College Code - 1416

ECSI College Code - F5

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