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Considering Consolidation?

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Are you tired of managing multiple federal student loan payments, with multiple interest rates or multiple servicers? If so, now may be the time for loan consolidation. The U.S. Department of Education made the landmark decision to allow you to choose your consolidation servicer under the Direct Consolidation Loan program.

Ready to Go?

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What Is It? Is It Right for You?

What Is Your Estimated New Interest Rate?

The interest rate on a Direct Consolidation loan uses the weighted average interest rate from the loans you want to consolidate. Follow these six steps to estimate the weighted average interest rate.


  1. Multiply each loan amount by its interest rate to obtain the "per loan weight factor."

    Loan 1: $10,000 x 6.8% = 680

    Loan 2: $2,000 x 3.8% = 76

  2. Add the per loan weight factors together.

    680 + 76 = 756

  3. Add the loan amounts together.

    $10,000 + $2,000 = $12,000

  4. Divide the "total per loan weight factor" by the "total loan amount," and then multiply by 100 to calculate the weighted average.

    (756 / 12,000) x 100

    or 0.063 x 100 = 6.3%

  5. Round Step 4's result to the nearest higher one-eighth of one percent* if it's not already on an eighth of a percent.

    Round 6.3 up to 6.375

  6. SAVE
    Sign up for Auto Pay, our free electronic monthly payment service, and your lender (the U.S. Department of Education) will give you a 0.25% interest rate reduction.

    After signing up for Auto Pay for free, reduce your interest rate by 0.25, or to 6.125 in this example.

*1/8th of 1% includes:
0.125  |  0.250  |  0.375  |  0.500  |  0.625  |  0.750  |  0.875  |  1.000

Ready to Go?

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