If a student loan borrower wants to consolidate student loans with the federal government, it is important to recognize that the resulting interest rate is not lowered

1. Consolidate Student Loans
If a student loan borrower wants to consolidate student loans with the federal
government, it is important to recognize that the resulting interest rate is not
lowered. Rather, according to Make Lemonade, the resulting interest rate is a
weighted average of the borrower’s various interest rates on current student loans.
Then, the weighted average interest rate is rounded up to the nearest 1/8% when
the borrower wants to consolidate student loans.
When you consolidate student loans with the federal government, you consolidate
student loans into a Direct Consolidation Loan. Your interest rate is not lowered,
but is equal to a weighted average of your current interest rates and then rounded to
the nearest 1/8%. I read on Make Lemonade that when you consolidate student
loans, you preserve certain borrower protections such as deferral and forbearance
as well as access to federal repayment programs.
If you would like to consolidate student loans with the federal government, Make
Lemonade has a helpful student loan calculator that shows you the differences
when you consolidate student loans and refinance student loans. Interestingly, you
save more money when you refinance student loans because your interest rate and
monthly payment decreases. When you consolidate student loans, your interest rate
doesn’tdecrease, but is a weighted average of your existing student loan debt
interest rates.
If you consolidate student loans, it is important to remember that only your federal
student loans can be consolidated. To consolidate student loans means to combine
your existing federal student loans into a single Direct Consolidation Loan with a
single monthly payment and interest rate. Make Lemonade compares the benefits
when you consolidate student loans and refinance student loans, and also has a

2. helpful student loan calculator comparing thestudent loan consolidation and
student loan refinancing.
I read on the personalfinance site Make Lemonade that one reason to consolidate
student loans into a Direct Consolidation Loan is to organize your student loan
payments. For example, rather than making multiple student loan payments with
different due dates, a student loan borrower can have one student loan payment
with a single due date when you consolidate student loans.