Congress established the Federal Consolidation Loan program as part of the Higher Education Act to help make the repayment of student loan debt easier for student borrowers. A Federal Consolidation Loan allows you to combine all of your eligible Federal Education loans into one loan with a low, fixed interest rate and a flexible repayment plan. There are no fees or credit checks as part of this program.

Depending on the total amount of student loans that you have you can choose one of several repayment plans with loan repayment periods up to 360 months. The interest rate on your Federal Consolidation Loan will be the weighted average of the current interest rates on your eligible student loans being consolidated rounded up to the nearest 1/8%, or 8.25%, whichever is less. The interest rates on most student loans are based on the Treasury Bill and are adjusted each year on July 1st. This means that currently you have the opportunity to lock in rates before they rise and lower them an additional 1.25% through new incentive programs.