Intended for financial aid counselors, this document provides guidelines to the Federal Direct Consolidation Loan Program for borrowers who are in school, as well as those in repayment, or in default. An introductory section explains the basics of the consolidated loan program, loan categories, and interest rates. Next, standards for borrower eligibility for consolidation are provided for student borrowers, parent borrowers, and married borrowers, as well as specific guidelines for consolidation by borrowers in school, including eligible loans, ineligible loans, advantages of consolidation, and how consolidation works. The same topics are covered for borrowers out of school. Borrowers in default are discussed in terms of rehabilitation, advantages of consolidation, and consolidation guidelines. Sections also cover repayment, postponing repayment, default, discharge, and consolidation of health professions loans. Each section includes answers to come common questions and relevant definitions. The last section provides contact information. Nineteen appendices provide such items as the application mailing for out-of-school and in-school borrowers, a sample loan statement, a sample "intent to continue" letter, a capitalization chart, poverty guidelines, monthly payment worksheets, and request for deferment forms. (DB)