Track & repay your loans

Understand loan consolidation

If you’re having difficulty making your current federal student loan payments, you have other repayment plan alternatives. Contact your loan servicer for details.

If you have more than one federal student loan, you may be able to consolidate them into a single loan with one monthly payment. This payment can be quite a bit lower than your total monthly payments on multiple loans.

Pros and cons of consolidation

Pros

  • You have a potential for lower monthly payments.
  • The interest rate is fixed for the life of the loan.
  • You may have flexible repayment options.
  • You’ll have a single monthly payment for multiple loans.

Cons

  • You may lose some discharge (cancellation) benefits if you include a Federal Perkins Loan in a consolidation loan.
  • If you extend your repayment period, you may pay more interest over time.
  • You may have an earlier repayment start date if you consolidate during the loan’s grace period.
  • Once a consolidation has been completed, you can’t reverse it—the original loans no longer exist, because they’re paid off by the consolidation.

Don’t default on your loans

If you don’t pay back a loan according to the terms of the Master Promissory Note (MPN) you signed, you may default on the loan. Default occurs if you don’t pay on time or if you don’t comply with other terms of your MPN.

What happens if you default?

If you default on a federal loan, the government may take some serious actions against you. You may:

  • Lose wages and tax refunds, which will be applied toward your unpaid loans
  • Lose eligibility for future student aid
  • Be unable to get a home, car, or other loan
  • Lose job opportunities or be unable to get a professional license
  • Damage your credit rating when your loan is reported to the national credit bureaus