Federal student loan consolidation takes several separate loans — each with its own balance, interest rate, and monthly due date — and combines them into a single new Direct Consolidation Loan with one payment and one servicer. * The interest rate on the new loan isn't negotiated or chosen — it's a fixed weighted average of the interest rates on all the loans you're consolidating, rounded up to the nearest one-eighth of a percent. That means consolidation doesn't lower your interest rate the way refinancing with a private lender might; it just locks in a blended version of what you were already paying across your different loans. * The application walks through your current loans, current employment status, whether you're in a grace period on any of them, and lets you choose your new repayment plan and term — new terms can run anywhere from 10 to 30 years depending on your total balance, with longer terms generally lowering the monthly payment but increasing total interest paid over the life of the loan. * One reason people consolidate beyond simplicity: certain repayment plans and forgiveness programs, including some income-driven repayment options, have specific loan-type eligibility rules, and consolidating older loan types into a Direct Consolidation Loan can make them eligible for programs they weren't eligible for before. * Processing typically takes 30 to 60 days from application to completion, depending on your servicer and how quickly your existing loans are paid off and folded into the new one. During that transition window, it's important to keep making payments on your existing loans until you get confirmation the consolidation is complete.