Carnegie Mellon University

Federal Loan Repayment

Loan Consolidation

As plans are made for repaying student loans, students may be considering loan consolidation as an option. Consolidation allows students to pay off some or all of their existing student loans by combining them into a single, large loan. Any consolidation loan is likely to significantly increase the total amount of interest that is required.  If students are unable to meet their current monthly repayment obligations, it may be best to avoid consolidation.

If you decide that consolidation is appropriate, there are two types of programs:

Federal Consolidation Loans

  • Fixed interest rate based on a weighted average of the current rates on existing loans
  • Deferment options predetermined by federal regulations
  • Cannot include non-federal (private) loan funds

Private Consolidation Loans

  • Can include both federal and non-federal student loan funds
  • Usually a variable interest rate
  • Forbearances available only at the lender's discretion

Resolving Loan Repayment Disputes

If students have a dispute with their servicer or another agency regarding repayment of federal student loans, they may consider contacting the Federal Student Aid Ombudsman for assistance. Contact the Ombudsman's office by phone at 877-557-2575 or by mail at this address:

U.S. Department of Education
FSA Ombudsman
830 First Street, NE
Fourth Floor
Washington, DC 20202-5144