Sara Routhier, Managing Editor and Outreach Director, has professional experience as an educator, SEO specialist, and content marketer. She has over five years of experience in the insurance industry. As a researcher, data nerd, writer, and editor she strives to curate educational, enlightening articles that provide you with the must-know facts and best-kept secrets within the overwhelming world o...

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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He also has an MBA from the University of South Florida. ...

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Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Mar 29, 2012

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Special Direct Consolidation Loans can be used to consolidate existing student loans, but they are only available for a limited time. In fact, there are only a few more months remaining for indebted students and graduates to take advantage of these consolidation loans.

This short-term student loan consolidation opportunity expires on June 30, 2012.

The benefits of Special Direct Consolidation Loans include merging all eligible student loans into a single monthly payment. The interest rate assigned to the consolidation will be an average of all of those that are merged together. After that rate is determined, students will then see an additional 0.25 percent reduced from that average, leaving them with a better interest rate than other consolidation opportunities.

Additionally, Special Direct Consolidation Loans allow all student loans that are merged together to retain their original terms. This consolidation opportunity does not extend the term, consequently saving students from accruing as much as interest as other opportunities would subject them to.

Eligibility Requirements

Borrowers eligible must meet both of the following requirements in order to qualify:

  • At least one student loan held by the Department
  • At least one commercially-held Federal Family Education Loan (FFEL)

Department-held loans refer to Direct Loans or FFEL loans owned or serviced by the U.S. Department of Education.

Commercially-held FFEL loans refer to those owned or serviced by an FFEL lender.

Finally, students interested in one of these limited student loan consolidations must be less than 270 days delinquent on their payments.

Students interested in applying can call 1-800-4-FED-AID (1-800-433-3243), or they may visit, log on by entering their Federal Student Aid PIN numbers, and look for a message in the Alerts box at the top right of the page which will inform them of their eligibility status.