What is loan consolidation and how does it work for Direct Loans?

Loan consolidation is a process offered by Direct Loans that allows borrowers to combine multiple federal student loans into a single loan with a fixed interest rate and extended repayment terms. By consolidating their loans, borrowers can simplify their loan repayment by making a single monthly payment instead of multiple payments to different loan servicers. Consolidation also provides the opportunity to switch from variable interest rates to a fixed rate, providing stability and potentially reducing overall interest costs. Moreover, borrowers may gain access to additional repayment plans, such as income-driven plans, which can help manage their loan obligations based on their income and family size. It is important to note that loan consolidation may reset certain benefits and may not be suitable for everyone, so borrowers should carefully consider their individual circumstances before deciding to consolidate their Direct Loans.