GLOSSARY · DEBT & HOUSING

Direct Consolidation Loan

A federal loan that combines several federal student loans into one. Its rate is the weighted average of the old rates rounded up to the nearest eighth of a point, so it does not lower the cost. It is used to make older FFEL and Perkins loans eligible for current repayment plans and Public Service Loan Forgiveness, and to simplify billing; unlike refinancing, it keeps federal protections.

Also called: federal consolidation, loan consolidation, consolidating federal loans

COMPUTE IT WITH YOUR NUMBERS

Federal student loan repayment plans →Which plan minimizes my payment or total cost now that SAVE is gone and RAP exists?

LEARN IT PROPERLY

CHAPTER · STUDENT LOAN STRATEGIES · DEEP DIVEFederal and Private Loans: Know What You Owe CHAPTER · STUDENT LOAN STRATEGIES · DEEP DIVEPublic Service Loan Forgiveness

SOURCES

Student Loan Consolidation. U.S. Department of Education, Federal Student Aid.

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