- Direct Consolidation Loan
- A federal loan that combines several federal student loans into a single loan with one servicer and one monthly payment. It does not lower your interest rate; the new rate is based on the average of the old ones. Its main effects are simpler billing and, often, a longer term with a lower payment.
- Weighted average rate
- The average of your loans’ interest rates, with each rate weighted by its balance, so larger loans count more. For example, $12,000 at 4.5% and $8,000 at 6% average 5.1%, not 5.25%. The calculator computes this first, and the consolidated rate is derived from it.
- Consolidated rate
- The fixed rate on the new federal consolidation loan: the weighted average rate rounded up to the nearest one-eighth of a percent (U.S. Department of Education rule, as used in this calculator). A 5.1% average becomes 5.125%. The rate is fixed for the life of the loan. Private consolidation sets rates by credit instead.
- Consolidation term
- The number of years over which the consolidated loan is repaid. You enter it here to test different payment levels. A longer term lowers the monthly payment but increases total interest, often substantially, because the combined balance stays outstanding longer. The calculator also shows the maximum federal term for your total balance.
- Tiered Standard plan
- The federal schedule that sets the maximum term of a consolidation loan by total balance. For consolidations made on or after July 1, 2026: 10 years under $25,000, 15 under $50,000, 20 under $100,000 and 25 at $100,000 or more (U.S. Department of Education, 2026). Older consolidations used a 10 to 30 year schedule.
- Total balance
- The sum of the balances of all loans you entered, which becomes the principal of the consolidated loan. Outstanding interest on the old loans is generally added to principal at consolidation, so use current payoff amounts. The total balance also determines the maximum federal consolidation term shown.
- New monthly payment
- The single fixed payment on the consolidated loan, calculated from the total balance, the consolidated rate and the term you entered. It replaces the separate payments on your old loans. If it is lower than their combined payments, that is usually because the term is longer, not because the loan got cheaper.
- Total interest
- The sum of all interest paid on the consolidated loan over the term, assuming every payment is made as scheduled. It is the new monthly payment times the number of payments, minus the total balance. Comparing it at different terms shows the cost of stretching repayment to get a lower payment.
- Private refinancing
- Replacing student loans with a new loan from a private lender, with a rate based on your credit and income rather than a weighted average. It can lower the rate, but refinancing federal loans into a private loan gives up federal benefits such as income-driven repayment and forgiveness programs. This calculator’s rate rule applies only to federal consolidation.
