What Does it Mean to Consolidate Student Loans

Learn about the benefits of consolidating student loans, how it can lower monthly payments, and statistics related to student loan consolidation.

Understanding Student Loan Consolidation

Student loan consolidation is the process of combining multiple student loans into a single loan with a single monthly payment. This can simplify repayment and potentially lower monthly payments by extending the repayment term or reducing the interest rate.

Benefits of Consolidating Student Loans

  • Single Monthly Payment
  • Potentially Lower Interest Rate
  • Extended Repayment Term
  • Simplified Repayment

Example Scenario

For example, if a borrower has multiple student loans with varying interest rates and monthly payments, consolidating those loans could mean combining them into one loan with a fixed interest rate and a single monthly payment. This can make it easier to manage and potentially reduce the total amount paid over time.

Case Study

According to a study conducted by the Consumer Financial Protection Bureau, borrowers who consolidated their student loans saw an average decrease in their monthly payments by 26%.


  • Over 45 million Americans have student loan debt
  • Only 6% of federal student loan borrowers have consolidated their loans
  • Student loan consolidation can save borrowers an average of $253 per month

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