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.

Alert!  On Oct. 6, 2021, the U.S. Department of Education announced a temporary period during which borrowers may receive credit for payments that previously did not qualify for PSLF or TEPSLF. Learn more about this time-limited opportunity for PSLF or TEPSLF.


  • Now, for a limited period of time, borrowers may receive credit for past payments made on loans that would otherwise not qualify for PSLF, if you worked full time for a qualifying employer

  • 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


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

  • 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

  • Loss of qualifying payments already made prior to consolidation towards Public Service Loan Forgiveness and Income-Driven Repayment Plans, and possible loss of other federal student loan benefits

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

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 LCP-E1140
PO Box 8008
Fishers, IN 46038-8008