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Each year students may take out several school loans to pay for academic expenses. Over time, it may become confusing and burdensome to manage all the details of student loans. Federal student loan consolidation provides an opportunity to manage one loan instead. If approved, the William D. Ford Federal Direct Loan Program will pay off all of your federal student loans and then issue a new loan with new payback dates and interest rates. Private school loans can not be consolidated under the federal program but can be refinanced through the original servicer or a private lending institution.

Before you begin the application process, you’ll need an FSA ID. Your FSA ID gives you access to your financial aid documents and information needed to complete the application. If you apply online, you’ll also use the ID to electronically sign your financial aid documents, including your new consolidated loan. You may also complete a paper copy of the application by downloading the form online and sending the completed form, with all required documents, to the address provided with the application. Access your account before starting the application to examine your loan information, ensuring all the information is accurate. Decide which loans to include in the consolidation plan. You’ll need to provide that information in detail during the application process.

The application consists of five sections and the entire application must be completed in the same session, which should take approximately 30 minutes, on average. It’s important to read the application instructions before starting your application. In the first section you’ll provide your personal information including social security number and drivers license or state ID information. You’ll also need to supply the names, addresses, and phone numbers for two personal references. In the second section you’ll provide information about the loans you’d like to consolidate. List any student loans you do not want to consolidate in the third section. This information is used when determining your payback arrangements for income-based repayment plans.

In the fourth section you’ll choose a repayment plan, selecting from several different options. The Repayment Estimator tool can help you decide which repayment plan is best for you, including repayment plan eligibility. Using the estimator, you can compare repayment plans, see what your monthly payment plan will be for each option, and learn how much interest you’ll pay. The interest rate of your new consolidated loan will be determined by the average of all the student loans included in the consolidation loan. Direct loan interest rates are fixed and remain fixed during the lifetime of the loan.

If you choose to repay your consolidation loan under an income-based option, you’ll need to provide personal financial information. You may be able to use the IRS Data Retrieval Tool during the application process, which will extract information from the previous years tax returns to determine your income.

The final section of the application provides information about your rights and responsibilities as a borrower and presents your Promise to Pay agreement. Read through the information carefully and make sure you understand the terms of the loan before you sign the legally binding document. After you sign and submit your consolidation application, you’ll receive a notice from William D. Ford Federal Direct Loan Program acknowledging receipt of your application. The notice will confirm the information you submitted and also provide a deadline for cancelling the application if you decide you do not want to consolidate. If approved, your new loan should be processed within a few weeks after submission.