FREQUENTLY ASKED QUESTIONS
Generally, Federal education loan(s) in default may be consolidated in a Direct Consolidation Loan if you:
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Make satisfactory repayment arrangements on the defaulted loans with the current loan holder(s) before consolidating, or;
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You agree to repay the new Direct Consolidation Loan under the Income-Contingent or Income-Based Repayment Plan
Borrowers cannot consolidate defaulted loans under these conditions:
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If a judgement has been issued against a defaulted loan, it cannot be included in the consolidation unless the judgement order has been dismissed
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If you are trying to consolidate defaulted Direct Consolidation Loans and do not include at least one additional eligible loan in the consolidation
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If my loans are defaulted can I consolidate?
The consolidation process generally takes 60-90 days, from when the lender has received your application for consolidation
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How long does it take to consolidate?
You must have at least one Direct Loan or Federal Family Education Loan (FFEL), that is in a grace period or in a repayment status.
If you are in default, you can consolidate under the Income-Contingent Repayment Plan or Income-Based Repayment Plan to bring your loans back in good standing.
If you are already consolidated, but have one new loan which is not included, you can add the new loan by re-consolidating.
If you are currently in an in-school status, you cannot consolidate until you graduate.
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Am I eligible for a direct consolidation loan?
If I am currently enrolled in school can I consolidate?
Yes, but with certain conditions. Borrowers cannot consolidate loans that are in an in-school status, but borrowers can still consolidate loans that are in grace, repayment or deferment
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Consolidating will pay off all of your current loans in full, allowing you to have one loan with one payment instead of multiple payments like you are currently facing.
This not only makes it easier to manage your debt, but you can choose from multiple plans to repay your new Direct Consolidation Loan, including plans that base the required monthly payment amount on your income.
These repayment options are designed to be flexible to meet the different and changing needs of your life and could allow you to qualify for the Federal Loan Forgiveness Program with the Department of Education.
What are the benefits of consolidating my loans?
No. The Federal Direct Loan Consolidation Program does not have a minimum balance to requirement to consolidate.
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Is there a minumum balance to consolidate loans?
08 / Does consolidation affect my credit?
Yes, as long as you are including at least one other Family Federal Educational Loan (FFEL) or Direct Loan into the new consolidation
No. Education debt is considered “good debt”, as it represents an investment that generally increases your ability to earn money to repay debt. Even though consolidation may increase the term of the loan, it does not considerably change repayment behavior.
Apply. Qualify. Enroll.
It's really that simple!
07 / I already consolidated, Can I consolidate again?