How do I ... Consolidate my student loans?

What you need to know

College loan consolidation can tame the problems and risks of having several loans with different terms and interest rates, especially variable-rate loans that could adjust higher in the future.

Consolidating loans is similar to refinancing a mortgage. In effect, you take out one big loan to pay off several smaller loans. The interest rate for the new loan will be a weighted average of all the loans you're consolidating. Essentially, you'll end up paying the same rate of interest, but it will be a fixed rate that won't go up as variable rates sometimes do.

To qualify for a federal consolidation loan, borrowers must have at least one federally insured student loan that is in grace, repayment, deferment or default status. Loans that are in an in-school status can't be included. Most subsidized and unsubsidized federal loans -- including Stafford loans, PLUS loans and Perkins loans -- are eligible for consolidation. You can obtain a loan directly from the government through Direct Consolidation Loans or through a private lender under the Federal Family Education Loan, or FFEL, program.