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Advantages

One Monthly Payment, Lower Monthly Payments, Longer Repayment Period, Fixed Interest Rate

Disadvantages
1. Greater Total Money Repaid - Interest accrues over a longer period when repayment period is extended.
2. Loss of Borrower Benefits - Borrower may lose cancellation benefits on Perkins Loan. Interest rate discounts and principal rebates may also be lost.

Interest Rates and Fees

The interest rate for FFEL and Direct Consolidation Loans is set according to a formula established by federal statute. The fixed rate is based on the weighed average of the interest rates on the loans at the time the borrower consolidates, rounded up to the nearest one-eighth of a percent. The interest rate does not exceed 8.25%. The consolidation rate is fixed for the life of the loan, which protects the borrower from future increases in variable rate loans but prevents them from benefiting from future decreases in variable rates. There are no application fees or prepayment penalties.

Under the FFEL Program, you can receive a Subsidized and/or an Unsubsidized FFEL Consolidation Loan, depending on the types of loans you’re consolidating. (Federal PLUS Consolidation Loans are included in the Unsubsidized FFEL Consolidation Loan category.)
Repayment

1. The Repayment begins within 60 days of the loan disbursement.

2.If Payback term ranges from 10-30 years depending on the amount of educational debt being repaid and on selected repayment options.

3.The Loans may be repaid in a shorter amount of time is borrower chooses to do so.

4. If the loan once consolidated, federal loans may not be unconsolidated. It,s true.