How to Consolidate Federal Student Loans - FDLP, FFELP, Etc

The cost of higher education continues to rise. Manythese programs, the fixed interest is usually the
students are unable to afford to finish college. Becauseweighted average of the interest rates of the loans
of this, Student Loan Consolidation has been madethat were consolidated. Congress set the formula for
available to students. Student Loan Consolidation isthe federal interest rate. Federal programs give
multiple loans combined into one loan. The U.S.graduates longer repayment periods. A student can
Government and the Department of Education hashave a repayment period from 10 to 30 years.
developed Federal Loans to help students pay for theirThere are two Programs for Federal Loan
higher education. These loans allow the student toConsolidation:o The Federal Family Education Loan
combine their federal loans into one loan. By payingProgram (FFEL) was a result of the Higher Education
one loan they're paying one creditor.Act of 1965. The program is funded by private and
Federal student loans are provided by the U.S.public partners. FFEL also makes use of government
Government and the U.S. Department of Education.funds and private companies. The private companies
The Federal Direct Student Loan Program (FDLP) andthat fund this program receive subsidies from the
Federal Family Education Loan Program (FFELP) havegovernment.o The William D. Ford Federal Direct Loan
been developed to help students and parentsProgram (FDLP), commonly known as Direct Loans.
consolidate their loans. These two programs allowWith this particular program, instead of the
students to consolidate PLUS Loans, Federal PerkinsGovernment or a private company, the U.S.
Loans and Stafford Loans. Students get lower monthlyDepartment of Education acts as the creditor, handling
repayments and a longer payment period. These loansthe student's loans.
usually provide lower interest rates and fees. For