For anyone with either Federal Family Education Loans (FFEL) or Direct Loans, the Higher Education Act provides for a loan consolidation program to help borrowers stay in control of their student loan debt. Under these two loan programs, your current loans will be paid off and the balance will be moved to a new, consolidated loan with a fixed interest rate and longer payout. This can simplify your life because it takes multiple loans with different repayment terms and combines them into one loan with one set of terms.
Your new interest rate may be higher than one or more of your current loans. It is calculated by creating a weighted average of all of your loans. In addition, your monthly payment will likely be lower than the total you are currently paying. The difference is that your repayment time will likely be extended beyond the original terms of some or all of your loans. Consolidating loans can be used to make loan repayment more manageable, but should be considered carefully as it is not always the best choice for everyone. Consider how much you currently pay, what your current interest rates are, and how much longer you have before repayment is complete on your loans before deciding to consolidate.