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When you consolidate your Federal student loans, you go through the Direct Consolidation Loan program.This program is designed specifically for Federal student loans and is administered by the Department of Education. Department of Education made the landmark decision to allow you to choose your consolidation servicer (of which, Great Lakes is one) under the Direct Consolidation Loan program.
The interest rate will also be fixed at the current Federal Direct loan rate.
One of the biggest myths when it comes to student loans is whether you can combine your Federal and private student loans. Well, since the middle of 2014, you can actually refinance and consolidate both your Federal and private student loans into a single loan with many private lenders.
Think about it: you just graduated from college and you have a combination of about five different student loans. However, there are times when combining all of your loans (both Federal and private) makes sense, and there are times when it may not.
Consolidating your federal student loans may help you to stay on track with your monthly payments and avoid the risk of student loan default—which can have serious consequences on your credit and your income. Once you log in, you can fill out a free loan consolidation application online—or download the paper application to fill out and send in by mail.
Keep in mind: If you have both federal and nonfederal loans, you will likely still have more than 1 servicer after loan consolidation.