[Skip to refinancing] This option is available only for federal student loans.
Access to income-driven repayment plans: If you’re having trouble affording your student loan bill, consider repaying your loans on an income-driven plan.
That means your payments will be tied to your earnings and your loan balance will be forgiven after 20 or 25 years.
Only federal direct loans qualify, so consolidating certain other types of loans into a direct consolidation loan will let you repay them on one of these plans.
Access to Public Service Loan Forgiveness: The same is true if you plan to apply for Public Service Loan Forgiveness.
The program will dissolve your remaining federal loan balance after you make 120 payments while working in a public service job.
But only direct loans qualify, so you can consolidate Federal Family Education Loans or Perkins loans into a direct consolidation loan to participate (read on for important caveats to consolidating Perkins loans).
Potentially higher interest payments: Your new loan term could be longer than your individual loans’ repayment schedules.
There are so many choices to make when you take out student loans: big loan or small loan, federal or private, co-signer or no co-signer.
You’ve got just as many choices when it’s time to repay your loans.
If you’re deciding between federal student loan consolidation and refinancing, it’s important to understand the differences before choosing which makes the most sense for you.
Here’s a quick breakdown: Learn more about the two types of student loan consolidation to see whether one is right for you.