Introduction Paying For and Selecting a College Federal Loans, Private Loans, and How to Tell the Difference Repayment Plans Student Loan Servicers and Ombudsman Offices COVID-19 and Student Loan Repayment If You Can't Repay Your Loan Loan Consolidation Programs Loan Cancellation/Forgiveness Programs If Your Loan Defaults Collection Activities Additional Information and Assistance Glossary Index of Resources
Loan Consolidation Programs
If you have more than one federal student loan, it may be simpler to combine them all into one loan with a single monthly payment in a Direct Consolidation Loan. By doing so, however, you may lengthen your repayment period, which will require you to pay more interest over the life of the loan. Non-federal student loans may not be combined into a federal loan consolidation program.
For a list of federal loans you may consolidate and qualifications standards, contact your loan servicer or the U.S. Department of Education (www.studentaid.gov/manage-loans/consolidation).
Federal student loan borrowers often receive solicitations and marketing from private lenders that offer refinancing options at favorable interest rates or with other incentives. Borrowers should careful when they consider these offers. Changing your federal loans to a private loan will prevent the option of income-driven repayment and loan-forgiveness programs. And private loans don’t carry some other protections for borrowers that apply to federal student loans.
There is no application fee to consolidate your federal education loans into a Direct Consolidation Loan. If someone requests a fee to consolidate your loans, you are not dealing with a U.S. Department of Education consolidation servicer.
If you have private or non-federal student loans, check with your loan servicer whether consolidation is an option. There are private lenders that provide options for refinancing private education loans,and may offer better interest rates than your existing loan
If you are a Minnesota resident with private or federal student loans, the State of Minnesota offers a program called the Student Educational Loan Fund Refinancing (SELF Refi) Program, administered by the Minnesota Office of Higher Education. The SELF Refi Program is available to Minnesota residents who earned a postsecondary certificate, diploma, or degree and meet credit criteria. Be careful in considering this refinancing option if you want to consolidate your federal student loans in this program, because refinancing federal loans to a non-federal program means giving up certain benefits, loan forgiveness programs, and other protections provided by law for federal student loans. For more information about the SELF Refi Program, contact the Minnesota Office of Higher Education as follows: