A lot of students are wondering if their consolidated student loans are eligible for forgiveness. While there is no official answer to this question, it can be answered by looking for consolidated loan forgiveness eligibility in three main areas: whether the consolidation loans were made before June 30 2005, whether the borrower is on a qualifying income-driven repayment plans, and whether or not the loans are Direct Loans. Are you wondering do I qualify for student loan forgiveness? If yes, then firstly congratulations on your financial achievement. Student loans forgiveness is a great way to balance your books and make your debts go away.
how to consolidate student loans
A student loan consolidation allows you to group your current and past loans into a new one. You can then repay the new loan with a set monthly payment option. But there are other benefits that you may not be aware of. This can include loan forgiveness, extended repayment, lower interest rates and reduced payments. Whether you want the security of a shorter or longer repayment period or simply want to lower the current expense, there are several steps to take when consolidating your loans. Some new rules unveiled by the Consumer Financial Protection Bureau (CFPB) will change the way that debt collectors handle student loans. Are your in school and wondered about consolidation, repayment plans, and other ways to manage your student loans? Since education is a lifelong investment, you’ll have decades to pay off your student loan debt. This guide will walk you through the basics of student loan forgiveness and answers some of the questions students commonly have.
We’re so glad you asked that question!
The answer is yes, consolidated student loans are eligible for forgiveness. The federal government allows you to consolidate your student loans, which means you can combine several student loans into one bigger loan that is paid off over time.
As a rule, this doesn’t change the status of the loan, so if your original loans were eligible for forgiveness, your consolidated loan will still be eligible.
In some cases, though, consolidation could affect your ability to qualify for certain types of forgiveness. You should check with your lender before consolidating to make sure that’s not the case!
Student loans can be a real pain in the butt. They make life difficult, and they can make you feel like you’re drowning in debt. But there’s good news: if your loans are federal student loans, you may be eligible for forgiveness!
Consolidated loans are often not eligible for forgiveness, but that’s because consolidated loans typically don’t involve federal student loans. However, if your consolidated loan actually is made up of federal student loans, then the consolidation process doesn’t change anything when it comes to forgiveness eligibility.
If you have a consolidated loan and want to see whether it is eligible for forgiveness, check out this page from the Department of Education. If you discover that your loan isn’t eligible for forgiveness, don’t worry: there are other ways to get relief from your student loan debt! You can read more about them here (link to this info).
If you’re wondering whether or not your consolidated student loans qualify for loan forgiveness, there are a few things to consider.
First, consolidating your loans will reset the clock on your repayment schedule. This means that if you’ve already been making payments on your loans and have built up time toward loan forgiveness before consolidating, it’ll all be reset when the consolidation goes through. So the first thing to consider is whether or not it makes sense to consolidate given this fact.
Next, you need to think about what kinds of debts you have and whether they’re eligible for debt forgiveness in the first place. Consolidated student loans are eligible for almost all of the federal debt forgiveness programs, but there are some exceptions. For example, income-driven repayment plans (IDRs) require that at least one of your underlying debts be a Direct Loan from the Department of Education in order for you to qualify. If none of your eligible debts are Direct Loans, then consolidating them won’t make them eligible for IDR. And since most federal student loan forgiveness programs are based on IDR—including Public Service Loan Forgiveness (PSLF)—this is an important thing to keep in mind.
If you are a former student, it’s important to know whether your student loans qualify for forgiveness. However, many students don’t know what the requirements are and whether their specific situation will allow them to apply for forgiveness.
The good news is that most federal student loans are eligible for forgiveness, including consolidated loans. However, this doesn’t mean that you should wait until you finish your degree to apply for forgiveness.
In order to be eligible for forgiveness, you must first submit an application with your lender and provide proof of income as well as other documentation. However, some students may not be able to meet these requirements right away. If this is the case, there are other options available that can help ease the burden of paying back your loan.
federal student loan forgiveness
Learn about consolidation so you can weigh the pros and cons and decide whether a Direct Consolidation Loan is right for you.
A Direct Consolidation Loan allows you to consolidate (combine) multiple federal education loans into one loan. The result is a single monthly payment instead of multiple payments. Loan consolidation can also give you access to additional loan repayment plans and forgiveness programs.
There is no application fee to consolidate your federal education loans into a Direct Consolidation Loan.
You may be contacted by private companies that offer to help you apply for a Direct Consolidation Loan, for a fee. These companies have no affiliation with the U.S. Department of Education (ED) or ED’s consolidation loan servicers. There’s no need to pay anyone for assistance in getting a Direct Consolidation Loan.
Should I consolidate my loans?
The answer depends on your individual circumstances.
Pros
- If you currently have federal student loans that are with different loan servicers, consolidation can greatly simplify loan repayment by giving you a single loan with just one monthly bill.
- Consolidation can lower your monthly payment by giving you a longer period of time (up to 30 years) to repay your loans.
- If you consolidate loans other than Direct Loans, consolidation may give you access to additional income-driven repayment plan options and Public Service Loan Forgiveness (PSLF). (Direct Loans are from the William D. Ford Federal Direct Loan Program.)
- You’ll be able to switch any variable-rate loans you have to a fixed interest rate.
Cons
- Because consolidation usually increases the period of time you have to repay your loans, you will likely make more payments and pay more in interest than would be the case if you didn’t consolidate.
- When you consolidate your loans, any outstanding interest on the loans that you consolidate becomes part of the original principal balance on your consolidation loan, which means that interest may accrue on a higher principal balance than might have been the case if you had not consolidated.
- Consolidation may also cause you to lose certain borrower benefits—such as interest rate discounts, principal rebates, or some loan cancellation benefits—that are associated with your current loans.
- If you’re paying your current loans under an income-driven repayment plan, consolidating those loans will cause you to lose credit for any payments made toward income-driven repayment plan forgiveness.
If consolidation would cause you to lose the benefits associated with some of your current loans and you are working toward earning those benefits, you should not include those loans in your new Direct Consolidation Loan. When you apply for a Direct Consolidation Loan, you don’t have to consolidate all of your eligible loans.
For example, if you have Federal Perkins Loans and you are employed in an occupation that would qualify you for Perkins Loan cancellation benefits, you may not want to include your Perkins Loans when you consolidate. Leaving out your Perkins Loans will preserve the benefits on those loans.
If you want to lower your monthly payment amount but are concerned about the impact of loan consolidation, you might want to consider deferment or forbearance as options for short-term payment relief, or consider switching to an income-driven repayment plan for longer-term payment relief.
Once your loans are combined into a Direct Consolidation Loan, they cannot be removed. The loans that were consolidated are paid off and no longer exist.
What types of loans can be consolidated?
Most federal student loans, including the following, are eligible for consolidation:
- Subsidized Federal Stafford Loans
- Unsubsidized and Nonsubsidized Federal Stafford Loans
- PLUS loans from the Federal Family Education Loan (FFEL) Program
- Supplemental Loans for Students
- Federal Perkins Loans
- Nursing Student Loans
- Nurse Faculty Loans
- Health Education Assistance Loans
- Health Professions Student Loans
- Loans for Disadvantaged Students
- Direct Subsidized Loans
- Direct Unsubsidized Loans
- Direct PLUS Loans
- FFEL Consolidation Loans and Direct Consolidation Loans (only under certain conditions)
- Federal Insured Student Loans
- Guaranteed Student Loans
- National Direct Student Loans
- National Defense Student Loans
- Parent Loans for Undergraduate Students
- Auxiliary Loans to Assist Students
Private education loans are not eligible for consolidation, but for some Direct Consolidation Loan repayment plans, the total amount of your education loan debt—including any private education loans—determines how long you have to repay your Direct Consolidation Loan.
Direct PLUS Loans received by parents to help pay for a dependent student’s education cannot be consolidated together with federal student loans that the student received.
When can I consolidate my loans?
Generally, you are eligible to consolidate after you graduate, leave school, or drop below half-time enrollment.
What are the requirements to consolidate a loan?
Here are some of the eligibility requirements for receiving a Direct Consolidation Loan:
- The loans you consolidate must be in repayment or in the grace period.
- Generally, you cannot consolidate an existing consolidation loan unless you include an additional eligible loan in the consolidation.
- Under certain circumstances, you may reconsolidate an existing FFEL Consolidation Loan without including any additional loans.*
- If you want to consolidate a defaulted loan, you must either make satisfactory repayment arrangements (defined as three consecutive monthly payments) on the loan before you consolidate, or you must agree to repay your new Direct Consolidation Loan under the
- Income-Based Repayment Plan,
- Pay As You Earn Repayment Plan,
- Revised Pay As You Earn Repayment Plan, or
- Income-Contingent Repayment Plan.
- If you want to consolidate a defaulted loan that is being collected through garnishment of your wages, or that is being collected in accordance with a court order after a judgment was obtained against you, you cannot consolidate the loan unless the wage garnishment order has been lifted or the judgment has been vacated.
*You may be able to reconsolidate an existing
- delinquent or defaulted FFEL Consolidation Loan and repay your new Direct Consolidation Loan under an income-driven repayment plan;
- FFEL Consolidation Loan in order to qualify for the PSLF Program; or
- FFEL Consolidation Loan to use the no accrual of interest benefit for active duty service members, which states that you’re not required to pay the interest that accrues during periods of qualifying active duty military service (for up to 60 months) on the portion of a Direct Consolidation Loan that repaid a Direct Loan Program or FFEL Program loan first disbursed on or after Oct. 1, 2008.
What is the interest rate on a consolidation loan?
A Direct Consolidation Loan has a fixed interest rate for the life of the loan. The fixed rate is the weighted average of the interest rates on the loans being consolidated, rounded up to the nearest one-eighth of one percent. There is no cap on the interest rate of a Direct Consolidation Loan.
When do I begin repayment?
Repayment of a Direct Consolidation Loan will begin within 60 days after the loan is disbursed (paid out). Your loan servicer will let you know when the first payment is due.
If any of the loans you want to consolidate are still in the grace period, you have the option of indicating on your Direct Consolidation Loan application that you want the servicer that is processing your application to delay the consolidation of your loans until closer to the grace period end date. If you select this option, you won’t have to begin making payments on your new Direct Consolidation Loan until closer to the end of the grace period on your current loans.
Are there different repayment plans?
Borrowers have different needs, so there are several repayment plans—including income-driven repayment plans, which base your monthly payment amount on your income and family size. You’ll select a repayment plan when you apply for a Direct Consolidation Loan. Learn about repayment plans.
How do I apply for a Direct Consolidation Loan?
Apply for a Direct Consolidation Loan. You can complete and submit the application online, or you can download and print a paper application for submission by U.S. mail.
After you submit your application electronically or by mailing a paper application, the consolidation servicer you selected will complete the actions required to consolidate your eligible loans. The consolidation servicer will be your point of contact for any questions you may have related to your consolidation application.
Unless the loans you want to consolidate are in a deferment, forbearance, or grace period, it’s important for you to continue making payments on those loans until your consolidation servicer tells you that they have been paid off by your new Direct Consolidation Loan.
Whom do I contact if I have questions about consolidation?
This depends on where you are in the consolidation process.
To ask questions about consolidating your loans before you apply for a Direct Consolidation Loan, contact the Federal Student Aid Information Center (FSAIC) at 1-800-433-3243.
To request technical assistance while you are logged in and completing the Federal Direct Consolidation Loan Application and Promissory Note online, either complete and submit the feedback form or contact FSAIC at 1-800-433-3243.
To ask questions after you have submitted your Federal Direct Consolidation Loan Application and Promissory Note, contact the servicer for your new Direct Consolidation Loan. If you submitted your application online, your consolidation servicer’s contact information was provided at the end of the online process. If you submitted a paper application by U.S. mail, your consolidation servicer’s contact information was available when you downloaded or printed the paper application.
student loan forgiveness
In certain situations, you can have your federal student loans forgiven, canceled, or discharged. Learn more about the types of forgiveness and whether you qualify due to your job or other circumstances.
Are you looking for a loan forgiveness or discharge form?
View Loan Forgiveness and Discharge Forms
Understanding Loan Forgiveness
Forgiveness, cancellation, or discharge of your loan means that you are no longer required to repay some or all of your loan. Find out more using the links below.
Differences Between Forgiveness, Cancellation, and Discharge
The terms forgiveness, cancellation, and discharge mean nearly the same thing, but they’re used in different ways. If you’re no longer required to make payments on your loans due to your job, this is generally called forgiveness or cancellation. If you’re no longer required to make payments on your loans due to other circumstances, such as a total and permanent disability or the closure of the school where you received your loans, this is generally called discharge.
It’s important to remember that outside of the circumstances that may qualify you to have your loans forgiven, canceled, or discharged, you remain responsible for repaying your loan—whether or not you complete your education, find a job related to your program of study, or are happy with the education you paid for with your loan. Even if you were a minor (under the age of 18) when you signed your promissory note or received the loan, you are still responsible for repaying your loan.
Types of Forgiveness, Cancellation, and Discharge
The summaries below offer a quick view of the types of forgiveness, cancellation, and discharge available for the different types of federal student loans.
Public Service Loan Forgiveness
Available for Direct Loans.*
If you are employed by a government or not-for-profit organization, you may be able to receive loan forgiveness under the Public Service Loan Forgiveness (PSLF) Program.
PSLF forgives the remaining balance on your Direct Loans after you have made 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer.
Teacher Loan Forgiveness
Available for Direct Loans and FFEL Program loans.
If you teach full-time for five complete and consecutive academic years in a low-income elementary school, secondary school, or educational service agency, you may be eligible for forgiveness of up to $17,500 on your Direct Loan or FFEL Program loans.
Note: You may not receive a benefit for the same qualifying payments or period of service for Teacher Loan Forgiveness and Public Service Loan Forgiveness.
Note: The limited PSLF waiver temporarily waives this restriction for individuals who previously received Teacher Loan Forgiveness.
Closed School Discharge
Available for Direct Loans, FFEL Program loans, and Perkins Loans.
If your school closes while you’re enrolled or soon after you withdraw, you may be eligible for discharge of your federal student loan.
Perkins Loan Cancellation and Discharge
Available only for Federal Perkins Loans.
You may be eligible to have all or a portion of your Perkins Loan canceled (based on your employment or volunteer service) or discharged (under certain conditions). This includes Perkins Loan Teacher Cancellation.
Total and Permanent Disability Discharge
Available for Direct Loans, FFEL Program loans, and Perkins Loans.
If you’re totally and permanently disabled, you may qualify for a discharge of your federal student loans and/or Teacher Education Assistance for College and Higher Education (TEACH) Grant service obligation.
Discharge Due to Death
Available for Direct Loans, FFEL Program loans, and Perkins Loans.
Federal student loans will be discharged due to the death of the borrower or of the student on whose behalf a PLUS loan was taken out.
Discharge in Bankruptcy (in rare cases)
Available for Direct Loans, FFEL Program loans, and Perkins Loans.
In some cases, you can have your federal student loan discharged after declaring bankruptcy. However, discharge in bankruptcy is not an automatic process.
Borrower Defense to Repayment
Available for Direct Loans.*
You may be eligible for discharge of your federal student loans based on borrower defense to repayment if you took out the loans to attend a school and the school did something or failed to do something related to your loan or to the educational services that the loan was intended to pay for. The specific requirements to qualify for a borrower defense to repayment discharge vary depending on when you received your loan.
False Certification Discharge
Available for Direct Loans and FFEL Program loans.
You might be eligible for a discharge of your federal student loan if your school falsely certified your eligibility to receive a loan.
Unpaid Refund Discharge
Available for Direct Loans and FFEL Program loans.
If you withdrew from school and the school didn’t make a required return of loan funds to the loan servicer, you might be eligible for a discharge of the portion of your federal student loan(s) that the school failed to return.
Forgery Discharge
Available for Direct Loans, as well as FFEL Program loans and Federal Perkins Loans held by the U.S. Department of Education.
Forgery is the creation of a false written document or alteration of a genuine one, with the intent to defraud. Victims of identity theft are frequently also the victims of forgery.
If you believe you were the victim of forgery, you might be eligible for a discharge of federal student loan(s) fraudulently made in your name.
Eligibility for Parent Borrowers
As with loans made to students, a parent PLUS loan can be discharged if you die, if you (not the student on whose behalf you obtained the loan) become totally and permanently disabled, or if your loan is discharged in bankruptcy. Your parent PLUS loan may also be discharged if the child for whom you borrowed dies.
In addition, all or a portion of a parent PLUS Loan may be discharged in any of these circumstances:
- The student for whom you borrowed could not complete his or her program because the school closed.
- Your eligibility to receive the loan was falsely certified by the school.
- Your eligibility to receive the loan was falsely certified through identity theft.
- The student withdrew from school, but the school didn’t pay a refund of your loan money that it was required to pay under applicable laws and regulations.
Contact your loan servicer for more information.
How to Apply For Forgiveness
Contact your loan servicer if you think you qualify. If you have a Perkins Loan, you should contact the school that made the loan or the loan servicer the school has designated.
Loan Payments During the Application Review Period
Depending on the type of forgiveness, cancellation, or discharge you’re applying for, you may have to make payments during your application review. Check with your loan servicer to find out whether you must continue making payments during the application review period.
My Application Was Approved
If you qualify for forgiveness, cancellation, or discharge of the full amount of your loan, you are no longer obligated to make loan payments. If you qualify for forgiveness, cancellation, or discharge of only a portion of your loan, you are responsible for repaying the remaining balance.
If you qualify for certain types of loan discharge, you may also receive a refund of some or all of the payments you made on the loan, and any adverse information related to your delinquency or default on the loan may be deleted from your credit record. If the loan was in default, the discharge may erase the default status. If you have no other defaulted loans, you would regain eligibility for federal student aid.
My Application Was Denied
If your application was denied, you’ll remain responsible for repaying your loan according to the terms of the promissory note that you signed. Talk to your loan servicer about repayment options if you have a Direct Loan or FFEL Program loan. Check out repayment options.
If your loan is in default, visit Getting Out of Default to find out how to begin repaying your loan and your options for getting out of default.
If you believe that your application was denied in error, contact your loan servicer for more information.
should i consolidate my student loans
Consolidating your federal education loans can simplify your payments, but it also can result in the loss of some benefits.
Learn about consolidation so you can weigh the pros and cons and decide whether a Direct Consolidation Loan is right for you.
A Direct Consolidation Loan allows you to consolidate (combine) multiple federal education loans into one loan. The result is a single monthly payment instead of multiple payments. Loan consolidation can also give you access to additional loan repayment plans and forgiveness programs.
There is no application fee to consolidate your federal education loans into a Direct Consolidation Loan.
You may be contacted by private companies that offer to help you apply for a Direct Consolidation Loan, for a fee. These companies have no affiliation with the U.S. Department of Education (ED) or ED’s consolidation loan servicers. There’s no need to pay anyone for assistance in getting a Direct Consolidation Loan.
Should I consolidate my loans?
The answer depends on your individual circumstances.
Pros
- If you currently have federal student loans that are with different loan servicers, consolidation can greatly simplify loan repayment by giving you a single loan with just one monthly bill.
- Consolidation can lower your monthly payment by giving you a longer period of time (up to 30 years) to repay your loans.
- If you consolidate loans other than Direct Loans, consolidation may give you access to additional income-driven repayment plan options and Public Service Loan Forgiveness (PSLF). (Direct Loans are from the William D. Ford Federal Direct Loan Program.)
- You’ll be able to switch any variable-rate loans you have to a fixed interest rate.
Cons
- Because consolidation usually increases the period of time you have to repay your loans, you will likely make more payments and pay more in interest than would be the case if you didn’t consolidate.
- When you consolidate your loans, any outstanding interest on the loans that you consolidate becomes part of the original principal balance on your consolidation loan, which means that interest may accrue on a higher principal balance than might have been the case if you had not consolidated.
- Consolidation may also cause you to lose certain borrower benefits—such as interest rate discounts, principal rebates, or some loan cancellation benefits—that are associated with your current loans.
- If you’re paying your current loans under an income-driven repayment plan, consolidating those loans will cause you to lose credit for any payments made toward income-driven repayment plan forgiveness.
If consolidation would cause you to lose the benefits associated with some of your current loans and you are working toward earning those benefits, you should not include those loans in your new Direct Consolidation Loan. When you apply for a Direct Consolidation Loan, you don’t have to consolidate all of your eligible loans.
For example, if you have Federal Perkins Loans and you are employed in an occupation that would qualify you for Perkins Loan cancellation benefits, you may not want to include your Perkins Loans when you consolidate. Leaving out your Perkins Loans will preserve the benefits on those loans.
If you want to lower your monthly payment amount but are concerned about the impact of loan consolidation, you might want to consider deferment or forbearance as options for short-term payment relief, or consider switching to an income-driven repayment plan for longer-term payment relief.
Once your loans are combined into a Direct Consolidation Loan, they cannot be removed. The loans that were consolidated are paid off and no longer exist.
What types of loans can be consolidated?
Most federal student loans, including the following, are eligible for consolidation:
- Subsidized Federal Stafford Loans
- Unsubsidized and Nonsubsidized Federal Stafford Loans
- PLUS loans from the Federal Family Education Loan (FFEL) Program
- Supplemental Loans for Students
- Federal Perkins Loans
- Nursing Student Loans
- Nurse Faculty Loans
- Health Education Assistance Loans
- Health Professions Student Loans
- Loans for Disadvantaged Students
- Direct Subsidized Loans
- Direct Unsubsidized Loans
- Direct PLUS Loans
- FFEL Consolidation Loans and Direct Consolidation Loans (only under certain conditions)
- Federal Insured Student Loans
- Guaranteed Student Loans
- National Direct Student Loans
- National Defense Student Loans
- Parent Loans for Undergraduate Students
- Auxiliary Loans to Assist Students
Private education loans are not eligible for consolidation, but for some Direct Consolidation Loan repayment plans, the total amount of your education loan debt—including any private education loans—determines how long you have to repay your Direct Consolidation Loan.
Direct PLUS Loans received by parents to help pay for a dependent student’s education cannot be consolidated together with federal student loans that the student received.
When can I consolidate my loans?
Generally, you are eligible to consolidate after you graduate, leave school, or drop below half-time enrollment.
What are the requirements to consolidate a loan?
Here are some of the eligibility requirements for receiving a Direct Consolidation Loan:
- The loans you consolidate must be in repayment or in the grace period.
- Generally, you cannot consolidate an existing consolidation loan unless you include an additional eligible loan in the consolidation.
- Under certain circumstances, you may reconsolidate an existing FFEL Consolidation Loan without including any additional loans.*
- If you want to consolidate a defaulted loan, you must either make satisfactory repayment arrangements (defined as three consecutive monthly payments) on the loan before you consolidate, or you must agree to repay your new Direct Consolidation Loan under the
- Income-Based Repayment Plan,
- Pay As You Earn Repayment Plan,
- Revised Pay As You Earn Repayment Plan, or
- Income-Contingent Repayment Plan.
- If you want to consolidate a defaulted loan that is being collected through garnishment of your wages, or that is being collected in accordance with a court order after a judgment was obtained against you, you cannot consolidate the loan unless the wage garnishment order has been lifted or the judgment has been vacated.
*You may be able to reconsolidate an existing
- delinquent or defaulted FFEL Consolidation Loan and repay your new Direct Consolidation Loan under an income-driven repayment plan;
- FFEL Consolidation Loan in order to qualify for the PSLF Program; or
- FFEL Consolidation Loan to use the no accrual of interest benefit for active duty service members, which states that you’re not required to pay the interest that accrues during periods of qualifying active duty military service (for up to 60 months) on the portion of a Direct Consolidation Loan that repaid a Direct Loan Program or FFEL Program loan first disbursed on or after Oct. 1, 2008.
What is the interest rate on a consolidation loan?
A Direct Consolidation Loan has a fixed interest rate for the life of the loan. The fixed rate is the weighted average of the interest rates on the loans being consolidated, rounded up to the nearest one-eighth of one percent. There is no cap on the interest rate of a Direct Consolidation Loan.
When do I begin repayment?
Repayment of a Direct Consolidation Loan will begin within 60 days after the loan is disbursed (paid out). Your loan servicer will let you know when the first payment is due.
If any of the loans you want to consolidate are still in the grace period, you have the option of indicating on your Direct Consolidation Loan application that you want the servicer that is processing your application to delay the consolidation of your loans until closer to the grace period end date. If you select this option, you won’t have to begin making payments on your new Direct Consolidation Loan until closer to the end of the grace period on your current loans.
Are there different repayment plans?
Borrowers have different needs, so there are several repayment plans—including income-driven repayment plans, which base your monthly payment amount on your income and family size. You’ll select a repayment plan when you apply for a Direct Consolidation Loan. Learn about repayment plans.
How do I apply for a Direct Consolidation Loan?
Apply for a Direct Consolidation Loan. You can complete and submit the application online, or you can download and print a paper application for submission by U.S. mail.
After you submit your application electronically or by mailing a paper application, the consolidation servicer you selected will complete the actions required to consolidate your eligible loans. The consolidation servicer will be your point of contact for any questions you may have related to your consolidation application.
Unless the loans you want to consolidate are in a deferment, forbearance, or grace period, it’s important for you to continue making payments on those loans until your consolidation servicer tells you that they have been paid off by your new Direct Consolidation Loan.
Whom do I contact if I have questions about consolidation?
This depends on where you are in the consolidation process.
To ask questions about consolidating your loans before you apply for a Direct Consolidation Loan, contact the Federal Student Aid Information Center (FSAIC) at 1-800-433-3243.
To request technical assistance while you are logged in and completing the Federal Direct Consolidation Loan Application and Promissory Note online, either complete and submit the feedback form or contact FSAIC at 1-800-433-3243.
To ask questions after you have submitted your Federal Direct Consolidation Loan Application and Promissory Note, contact the servicer for your new Direct Consolidation Loan. If you submitted your application online, your consolidation servicer’s contact information was provided at the end of the online process. If you submitted a paper application by U.S. mail, your consolidation servicer’s contact information was available when you downloaded or printed the paper application.
how to consolidate student loans
How to Consolidate and Refinance Your Student Loans
There are two types of student loan consolidation: federal and private. Federal is only for federal student loans.
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There are two types of student loan consolidation: federal and private. Private consolidation is often referred to as refinancing. These processes are often confused, but they’re very different. Here’s how:
- Federal student loan consolidation combines multiple federal loans into a single federal loan through the Department of Education. You may need to consolidate to be eligible for some federal loan repayment programs, but federal consolidation won’t lower your interest rate. It may lower your payments by extending them.
- Student loan refinancing, which is also called private student loan consolidation, is a financial move you do through a private lender. If you qualify, you can save money by getting a lower interest rate.
Consolidation vs. refinancing
| Student loan consolidation | Student loan refinancing | |
|---|---|---|
| What does it do? | Combines multiple federal loans into one federal loan. | Combines private and/or federal loans into one private loan. |
| Which loans can I combine? | Federal loans only. | Private and/or federal loans. |
| Can I lower my rates? | No. | Yes. |
| Can I save money? | No. Consolidation may lower your payments by extending the loan term, but your interest amount will increase. | Yes. |
| Can I access federal loan protections, repayment options and forgiveness programs? | Yes. | No. |
| Will I pay just one monthly bill? | Yes. | Yes. |
Consolidating private student loans
Consolidating private student loans, or refinancing, means replacing multiple student loans — private, federal or a combination of the two — with a single, new, private loan. You’ll save money if your new loan has a lower interest rate.
Your financial history — including your credit score, income, job history and educational background — will dictate your new interest rate when you refinance. You typically need a credit score at least in the high 600s to qualify, and rates range from around 2% to more than 9%.
Consider private student loan consolidation if you have:
- Existing private student loans.
- Good or excellent credit, generally defined as credit scores of 690 or higher.
- A stable job.
- Access to a co-signer with those characteristics, if that doesn’t sound like you.
Refinancing federal student loans into a private consolidation loan means losing consumer protections specific to federal loans. Those include the option to tie payments to income and opportunities for loan forgiveness.
Like the federal government, private companies offer the option to consolidate multiple student loans into one. But while you can’t transfer private loans to the federal government, you can consolidate both federal and private loans with a private lender.
The goal with this process is not only to get the ease of a single payment, but to receive a lower interest rate based on your financial history.
Use a consolidation calculator to compare monthly payments under three different scenarios: federal student loan consolidation, private student loan refinancing and income-driven repayment plans.
Current rates from private refinancing lenders
https://embeds.nerdwallet.com/table/?table_id=6043&nwaMode=embedWant to pay less for your student loans?See if you pre-qualify for refinancing and compare real rates — not just ranges or estimates.
Federal student loan consolidation
Federal loan consolidation doesn’t have a credit requirement, and it offers the benefit of a single loan bill and potentially lower payments. But it’s only for federal loans, and it won’t cut your interest rate. Consider federal consolidation if you:
- Need to consolidate to be eligible for income-driven repayment or public service loan forgiveness. This is the case if you have Federal Family Education, Perkins or parent PLUS loans.
- Want a single federal loan payment, but don’t need it to be drastically lower.
- Are in student loan default and want to get back on track.
When you consolidate federal loans, the government pays them off and replaces them with a direct consolidation loan. You’re generally eligible once you graduate, leave school or drop below half-time enrollment. Consolidating your federal loans through the Department of Education is free; steer clear of companies that charge fees to consolidate them for you.
When you consolidate federal loans, your new fixed interest rate will be the weighted average of your previous rates, rounded up to the next ⅛ of 1%. So, for instance: If the average comes to 6.15%, your new interest rate will be 6.25%.
Additionally, you’ll get a new loan term ranging from 10 to 30 years. Your repayment term will generally start within 60 days of when your consolidation loan is first disbursed and will be based on your total federal student loan balance, among other factors.Frequently asked questionsShould I consolidate my student loans?Can you consolidate federal student loans?How do I consolidate my student loans?
How to consolidate federal loans
Log in to studentloans.gov and click on “Complete Consolidation Loan Application and Promissory Note.” You’ll need to finish the application in one session, so gather the documents listed in the “What do I need?” section before you start and set aside about 30 minutes to fill it out.
1. Enter which loans you do — and do not — want to consolidate.
2. Choose a repayment plan. You can either get a repayment timeline based on your loan balance or pick one that ties payments to income. If you pick an income-driven plan, you’ll fill out an Income-Driven Repayment Plan Request form next.
3. Read the terms before submitting the form online. Continue making student loan payments as usual until your servicer confirms consolidation is complete.
If your loans are in default, consolidation is one of a few methods to get your loans back on track. To consolidate defaulted loans you’ll need to make three full, on-time consecutive monthly payments on the defaulted loan and agree to enroll in an income-driven repayment plan.
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