What you’ll need: LOAN INFORMATION

What you need to know

After leaving college, many former students are hit with a barrage of bills from different student loans.

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.

For a listing of eligible loans, go to the Direct Consolidation Loans site.

If you’d prefer to work with a private lender, contact the consolidation department of a participating institution. You’ll find a list of the top 100 lenders at FinAid.

To get a consolidation loan directly through the federal government, fill out an application at the Direct Consolidation Loans site.

Loans made privately and without federal backing are not eligible for consolidation. If you can avoid taking a private loan, it’s best to do so. But if you already have one, consider trying to pay it off early, as it likely has a higher interest rate than federally backed student loans.