In a consolidation, a borrower's underlying loans are paid off and a new consolidation loan is created. These programs simplify loan repayment by combining into one new loan several types of Federal education loans that may have different terms and repayment schedules or may have been made by different lenders.

A borrower does NOT have to include all of their loans in a consolidation. For example, if a borrower wants to keep the Perkins loan separate, because they might be eligible for partial cancellation, they may do so. Do be aware this will result in a loan payment separate from the consolidated loan payment.

Borrowers should also check with their Direct/Stafford loan lender for information on whether a consolidation loan is right for them. Be specific with the consolidator on whether or not to include these loans. Keep in mind the following:

Benefits of consolidation:

  • Locking into a fixed interest rate for the life of the loan.
  • Combining payments into one affordable monthly payment with single point of contact.
  • Deferment eligibility.
  • Extend your repayment, 12 to 30 yrs based on the amount borrowed.
  • Choose a flexible repayment plan that works for you.

Drawbacks of consolidation:

  • Interest will begin as soon as a loan is consolidated rather than at the end of a grace period.
  • Perkins Loan borrowers will forfeit all cancellation or deferment options specific to the Perkins loan
  • Primary Care Loans and Institutional Loans cannot be included in a federal loan consolidation.
  • Possible higher interest rate than the rate on some of the loans currently being held. (All federal loans held by the Bursar's Office that are eligible for consolidation are at a fixed 5 %.)
  • Possible payment of more interest with repayment over a longer period of time.
  • Loss of grace period if consolidated while still "in school".
  • May affect deferment eligibility.
  • May lose borrower benefits already in place.

What Loans May be Consolidated?

From this office, only the Federal Perkins, Health Profession Pharmacy, and Nursing loans may be consolidated. All Institutional and Health Profession Primary Care loans cannot be consolidated.

Any questions regarding consolidation or information about Federal loans should be directed towards the Direct/Stafford Loan lender.

The Bursar's Office does not support or endorse any one loan consolidation agency. The following consolidation options are listed for your convenience only.

The University of Wisconsin - Madison
Bursar's Office - Student Loans
333 East Campus Mall #10501
Madison, WI 53715-1383
Phone: 608-262-1791 (Open until 4:30 PM)
Fax: 608-265-3201

Customer Service Window hours:
Monday, Tuesday, Thursday, Friday 8:00 AM to 4:00 PM
Wednesday: 9:15 AM to 4:00 PM