Consoldating college loans

You will no longer be listed as currently in default on your credit records, and no longer subject to tax intercepts, garnishments, or other collection efforts.

Once you are out of default, you can also choose one of the income-driven repayment plans.

Consolidation to get out of default works well for many borrowers with defaulted loans.

After obtaining a consolidation loan, you get a fresh start, becoming eligible for new loans, grants, and even deferments.

You should consider the pros and cons of consolidation before making this choice.

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

An interruption in this consecutive period is allowed for qualifying military service members or affected civilians.

These borrowers may resume their payments after their service is completed.

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.

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