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UCLA Student Loan Services and Collections
UCLA Student Loan Services and Collections - Debt Management

Loan Consolidation

A Federal Consolidation Loan combines multiple federal student loans into one new loan with a single student loan payment. The new loan will have a new interest rate, new terms and conditions. This loan is not to be confused with private consolidation loans which may consolidate other types of debt (credit cards, private loans, etc.,) as well as student loans, yet do not have the same benefits as a Federal Consolidation Loan.

Consolidation may be beneficial to some borrowers, but it may pose drawbacks for others. For example, Perkins Loan borrowers lose valuable interest subsidy and cancellation rights by consolidating. Also, consolidation is usually limited to larger loan amounts and may extend the loan repayment period. Extending the repayment period may increase your total finance charge, even though you may have a lower monthly payment. Be aware of all loan terms and conditions before consolidating your educational loans. Consolidation should only be considered after a thorough investigation of its benefits and drawbacks.

For further information on Federal Loan Consolidation, try visiting:


Introduction to Repayment

Starting Repayment
Knowing ‘the basics’ before making that first payment

Repayment Plans
Understanding the many choices offered

Deferments / Forbearance / Cancellations
Making use of benefits

Loan Consolidation
Determining the advantages and disadvantages