Consolidating a defaulted student loan

See the programs for military section of this site for information about other options for military service members and certain civilians affected by war or national emergencies.

Parent PLUS borrowers who also have other federal student loans and choose to consolidate with Direct will find that the PLUS loan taints the entire consolidation loan and will mean that they will not be eligible to repay the consolidation loan using IBR.

Remember, it’s in your best interest to act quickly to resolve the default, because the consequences of default can be severe.

If you have a defaulted federal student loan owned by the U. Department of Education (ED), immediately contact ED’s Default Resolution Group.

**Unless you make three voluntary, on-time, full monthly payments on a defaulted loan before you consolidate it, your choice of repayment plans for the new Direct Consolidation Loan will be limited to one of the income-driven repayment plans.

If you make three voluntary, on-time, full monthly payments before consolidating, you can choose from any of the repayment plans available to Direct Consolidation Loan borrowers.

If they wish to consolidate, parent PLUS borrowers may exclude the PLUS loans from the consolidation and pay them separately.

Comparing the Benefits You Regain After Rehabilitation and Consolidation Now that you have a better understanding of what rehabilitation and consolidation are, you can determine which option is best for you.

These include deferment, forbearance, cancellation, and affordable repayment rights.

Federal Consolidation Loans for Borrowers in Default As of July 1, 2010, the Direct Loan consolidation program is the only government consolidation loan program.

To consolidate a defaulted federal student loan into a new Direct Consolidation Loan, you must either Repayment in full is exactly as it sounds; you can repay the full amount that you owe at any time.

We understand that repayment in full is not a viable option for most people.

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