Hearings on student loan consolidation are presented. Only the Student Loan Marketing Association (Sallie Mae) has the authority to consolidate student loans and that authority--scheduled to expire on August 1, 1983-- is being reviewed. State guarantee agencies have requested the statutory authority to consolidate loans. The findings of a study by the General Accounting Office (GAO) and the position of the Department of Education are included in the testimony. GAO studied consolidation, the current and projected costs of consolidation, the imapct of loan consolidation on defaults, and the capability of the states to consolidate loans, along with potential legislative modifications affecting program expansion, interest rates, minimum loan amounts, and interest subsidies. Sallie Mae offers three repayment options to borrowers participating in the loan consolidation program--a constant, monthly repayment schedule; and two types of graduated repayment schedules. Since the program has been operating only 1 year, it is too early to assess the impact on loan defaults. Testimonies of the representatives of state guarantee agencies, Sallie Mae, and banking institutions are provided. A Sallie Mae student loan application form is included, along with instructions and supplementary information. (SW)