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Since 2010, most of these loans are made directly by the government. There are also many older loans made by private lenders, but guaranteed by the government.

(also known as federal family education loans or “FFEL”).

The truth is that lenders weight the average of the interest rates you're currently paying on your existing federal student loans and then round that number up to the nearest one-eighth of a percentage.

While the interest rate on the new loan may be lower than the higher interest rate, it will also be higher than the lower interest rate you're currently paying.

Student loan consolidation is a process through which you take out a new loan, which is then used to pay off your other existing student loans.

Instead of having multiple loans and loan payments, you have only one.

The federal student loan programs are highly regulated by Congress and the U. There are, however, a few important differences in available repayment plans for FFEL and Direct borrowers.

You should be wary if a private lender promises to dramatically lower your interest rate by consolidating your federal student loans.Consider how much longer it will take to repay the new loan and how much more in total interest you will have to pay as a result.Weigh that against the benefit of a lower interest rate, smaller monthly payments and having just one—not multiple—student loan payments to handle each month. Combining them with federal loans will disqualify you from applying for the benefits provided for federal student loans, such as to extending the loan-payment period , income-driven repayment plans, and federal loan forgiveness programs.Lenders will often offer loan holders certain benefits (discounts for auto-payments, a record of on-time payments, etc.) for being a good borrower.If your lender does not provide any benefits, you may want to consider consolidating your loans with a lender who does.

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