Loan Consolidation

A Direct Consolidation Loan allows you to combine multiple federal student loans into one loan, one payment and one fixed interest rate. If you decide to consolidate, you can choose your servicer – Good News, MOHELA can be your choice! The entire process typically takes between four and six weeks from the date your application is received.

Before completing a consolidation application, carefully consider the following information to determine whether loan consolidation is the best option for you.

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Income-Driven Repayment Account Adjustment

In April 2022, the U.S. Department of Education announced several updates that will bring borrowers closer to forgiveness under income-driven repayment (IDR) plans. Any borrowers with loans that have accumulated eligible time in repayment of at least 20 or 25 years will see automatic forgiveness, even if they are not currently on an IDR plan.

If you have Perkins loans, HEAL loans, or commercially held FFELP loans you can only get the full benefits of the one-time account adjustment if you submit a loan consolidation application by June 30, 2024.

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  • One monthly payment, one billing statement, one servicer

  • Higher variable interest rates will be calculated to provide a fixed interest rate

  • No fee to consolidate

  • Access to repayment plans that may not have been available to you unless you consolidate

  • Access to Public Service Loan Forgiveness if your loan types were previously not eligible


  • Extending the months/years to repay your loan(s) through consolidation may increase the total interest to be paid

  • Any outstanding interest on the loans you consolidate becomes part of the original principal balance on your consolidation loan, which means that interest may accrue on a higher principal balance than if you had kept your loans separate.

  • Consolidating during grace period may forfeit the remainder of your grace period, however you can indicate on the consolidation application if you would prefer to delay the consolidation to coincide with the end of your grace period

  • Interest rate for consolidation is weighted and rounded to the nearest 1/8th percent which may be higher than the interest rate of your loan(s) prior to consolidation

  • Some active duty military benefits for your student loan(s) may no longer apply if you consolidate

  • If any of your Direct PLUS loan(s), disbursed on behalf of a dependent, are then consolidated with your own education loan(s), disbursed on your behalf, this consolidation could result in the loss of eligibility for certain repayment plans for which your individual education loan(s) would have otherwise been eligible.

  • Loss of eligibility to defer payment on a Parent PLUS loan when the student is enrolled at least half-time

  • Potential loss of borrower benefits such as interest rate discounts or principal rebates

Checklist to Assist with Deciding if Consolidation is the Best Option for You:

  1. Review all of your loans to determine if the type of loan is eligible for consolidation (you can access your information via National Student Loan Data System (NSLDS))

  2. For eligible loan types, you must be out of school or attending school less than half-time

  3. Calculate the total amount of the monthly payments you are paying or are scheduled to pay for the loan(s) you wish to consolidate

  4. Calculate the approximate monthly payment if you consolidate - For the loan(s) you wish to consolidate use the weighted average interest rate rounded to the nearest 1/8th percent, the total balance (principal and interest) and the maximum number of years to repay based on the total balance

  5. Determine if the fixed interest rate for the consolidation loan makes financial sense for you

  6. Determine if any benefits you are eligible for will be lost if you consolidate

  7. Determine if you will qualify for repayment plans that you are not otherwise eligible unless you consolidate

  8. Make a decision if consolidation is the best option for you

Learn more about student loan consolidation about student loan consolidation or complete an application to consolidate your loans.

Ways to Apply for Consolidation

  • Online: Apply on (MOHELA is included in your options for your loan servicer)

  • Mail: Print, complete and mail a paper application
    To request MOHELA as the servicer of your new consolidation loan, include a letter with your consolidation application listing MOHELA.

If you decide to submit a consolidation request, please continue to make payments until you receive notification that the consolidation has been completed.

Adding Loans to Your Direct Consolidation Loan

You may request to add more eligible loans to a new Direct Consolidation Loan within 180 days of the consolidation being made (disbursed). Please submit your "Request to Add Loans form" to:

C/O Aidvantage
PO BOX 300006
GREENVILLE, TX 75403-3006

Note: Aidvantage manages the consolidation process on behalf of the U.S. Department of Education. After you apply for consolidation or request to add loans to your consolidation, Aidvantage will be your point of contact for any questions you may have about your consolidation application. After Aidvantage completes the origination of your consolidation loan, only then will MOHELA receive your new loan for servicing. We will send notification after this occurs.

MOHELA will not have any information about your consolidation application status after it has been submitted on, or mailed to the above address. To contact Aidvantage directly, please call: 1-800-722-1300.