In the process of consolidation, each original loan is paid in full and a new Direct Consolidation Loan is originated for the combined balance of the consolidated loans.
ED determines the interest rate of the Direct Consolidation Loan by taking the weighted average of the interest rates on your existing loans and rounding up to the nearest 1/8 of a percent (0.125).
Consolidation loans have longer terms than other loans. Although the monthly repayments are lower, the total amount paid over the term of the loan is higher than would be paid with other loans.
Consolidating federal student loans may be a good strategy to lower monthly payments or to get out of default, but it is not always a good idea.
As you weigh the pros and cons, keep in mind that timing is critical.
However, if you consolidate all those loans, you make a single payment.
Lower Monthly Payment Consolidation loan monthly payments are lower because the repayment period is longer.