Student Loan Consolidation

Consolidation is taking out a new Student Loan to pay off existing Student Loans.

Here are some factors you should consider when deciding if consolidation is right for you:

  • Are your monthly payments manageable? If your are having trouble making your monthly payments or have exhausted your deferment and forbearance options and want to avoid default, consolidation may help you.
  • How much are you willing to pay over the long-term? Like a home mortgage or car loan, extending the years of repayment increases the total amount you repay.
  • How many payments do you have left on your loans? If you are close to paying off your student loans, it may not be worth the time and effort to consolidate or extend payments.
  • How do you benefit? You have only one lender and one monthly payment. You may also have a lower interest rate. The consolidation interest rate is a fixed interest rate, which means the interest rate will stay the same throughout the repayment period.
  • Will you lose any of your existing benefits? Check with your lender to confirm that you will not lose deferment or cancellation benefits if you consolidate.
  • What loans can you consolidate? Most federal education loans are eligible for consolidation. Guaranteed Student Loans, Direct Subsidized and Unsubsidized Loans and Perkins Loans are most commonly consolidated by UMD students. SELF, University Trust Fund, Alternative, Ordean & Primary Care loans are not eligible for consolidation. For a complete list click on the link below.
  • Who should you consolidate with? You can choose any institution you wish, but for convenience this link will bring you to a list of institutions that other UMD student loan borrowers have commonly used to consolidate their loans. UMD, in no way, recommends one consolidation firm over another, nor has it intentionally left out any specific company.

For more information, contact:

U.S. Dept. of Education
Consolidation Dept.
P.O. Box 1723
Montgomery, AL 36102-1723
Phone:  800-557-7392