Making smaller payments over a longer time

Federal student loan consolidation allows you to combine one or more existing student loans into one single consolidation loan with a new repayment schedule. You will have lower monthly payments, but you will pay much higher interest over the life of the loan because you will be making smaller payments over a longer time.

When determining benefits that are available, you must consider each type of loan program, and the principal and interest components individually. The Department of Education pays the interest during the period of deferment for subsidized Stafford Loans and subsidized Federal Consolidation Loans. The Department of Education does not charge interest during the period of deferment for Perkins Loans and subsidized Federal Direct Loans.