What Is a Direct Consolidation Loan?

Credible takeaways

A Direct Consolidation Loan is a type of federal loan that combines multiple student debts into one, usually to help simplify repayment.
Direct Loan consolidation can be helpful for some borrowers, but it may not be the right move for everyone.
Consolidation and refinancing both combine loans, but consolidation is strictly for federal student loans.

If you owe multiple federal student loans, you may consider combining them into one with a Direct Consolidation Loan. Direct Consolidation Loans are offered by the U.S. Department of Education and they can streamline repayment and extend your loan terms.

Note that federal loan consolidation is different from student loan refinancing, though both can combine multiple debts into one. Federal loan consolidation won’t reduce your interest rate, but it will keep your student debt in the federal loan program. By contrast, refinancing federal loans with a private lender means replacing them with a private loan, thereby losing access to federal protections and repayment plans.

Here’s a closer look at federal Direct Loan consolidation, including its pros, cons, and how to apply.

Overview of Direct Consolidation Loans

If you owe federal student loans, you can consolidate one or more of them into a Direct Consolidation Loan. After consolidating, you can choose new repayment terms. You might opt for an income-driven repayment (IDR) plan or a standard plan with terms as long as 30 years, depending on your loan amount.

Your new interest rate will be the weighted average of your previous rates rounded up to the nearest one-eighth of one percent. You’ll also get the chance to choose a new loan servicer.

Consolidating multiple student loans into one can simplify repayment, as you’ll only have to make a single monthly payment. However, you don’t have to include all your federal loans in a consolidation.

For example, you might consolidate an older loan type, such as an FFEL or Perkins Loan, to make it eligible for an income-driven plan while leaving your other loans as they are. Consolidation is also one way to get unpaid student loans out of default and back into good standing.

Benefits of consolidation

Direct Loan consolidation has both pros and cons that are worth considering before you apply. Here are some of the potential benefits:

Simplify repayment: Consolidating multiple student loans can streamline repayment. Instead of having to make several payments to different loan servicers, you can pay a single bill each month to one of the federal loan servicers of your choice.
Reduce your monthly bills: If you select a longer repayment term or an income-driven repayment plan, you could make your monthly payments more affordable.
Gain access to income-driven repayment plans: Some federal loan types, such as FFEL and parent PLUS loans, must be consolidated before they’re eligible for income-driven repayment. Getting your loans on an IDR plan could also help you access student loan forgiveness. For instance, IDR plans offer loan forgiveness after 20 or 25 years of repayment. Plus, the Public Service Loan Forgiveness (PSLF) program requires that you make 120 payments on an IDR plan, along with meeting other criteria, to qualify for loan forgiveness.

Potential drawbacks of consolidation

At the same time, consider these potential disadvantages of Direct Loan consolidation:

Could increase your interest charges: Choosing a longer repayment period means more time in debt and higher total interest costs as a result.
Will trigger interest capitalization: When you consolidate, any unpaid interest will be added onto the principal balance of your new loan. This means you might end up paying interest on top of interest, further increasing your cost of borrowing.
Could lose special benefits: If you consolidate debts other than Direct Loans, you may lose certain perks. Older loans types, such as FFEL or Perkins Loans, may include protections like rate discounts or cancellation benefits that aren't available on modern loans. If you have special benefits like these, they could be revoked after consolidating.
Not available for private student loans: Direct Loan consolidation is only an option for federal student loans — you can’t consolidate your private loans this way.

Tip:

If you have private student loans, consider refinancing to potentially lower your interest rate and save money over the life of your loan.

Lender

Fixed (APR)

Loan Amounts

Min. Credit Score

4.4

Credible rating

3.85% -

$10,000 - $400,000

720

Check Rates

on Credible’s website

View Details

Overview

Brazos offers refinancing loans to Texas residents who have a bachelor’s degree or higher from an eligible school. There are no origination or application fees, and interest rates could be lower than what you find with other private lenders.

However, some borrowers may find that Brazos has relatively strict eligibility requirements. Borrowers must have a minimum income of $60,000 and a credit score of 720 or higher. If you can’t meet those minimums alone, you can add a cosigner that can be released after 24 on-time consecutive payments.

pros

Five loan terms available
Competitive rates
Cosigner release
No origination or application fees
Autopay discount of 0.25 percentage points

cons

Only available to Texas residents
High minimum credit and income requirements
Bachelor’s degree required

Interest rates

Fixed or variable

Minimum credit score

720

Minimum income

$60,000

Loan terms

5, 7, 10, 15, or 20 years

Loan amounts

$10,000 minimum, up to $150,000 for bachelor’s degrees and $400,000 for graduate, medical, law, or other professional degrees

Cosigner release

Yes, after 24 on-time payments

Eligibility

Borrower must be a Texas resident and a U.S. citizen or permanent resident who has a bachelor’s degree or higher.

Read full review

4.5

Credible rating

- ¹

$5,000 up to the full balance

650

Check Rates

on Credible’s website

View Details

Overview

Undergraduate and graduate students can refinance their student loans with SoFi® if they meet eligibility requirements. You can prequalify for a loan in two minutes without affecting your credit score, and the lender offers both fixed and variable rates. Plus, SoFi offers unique benefits to its members, including access to networking events and financial advisers.

SoFi requires a minimum loan balance of $5,000 to refinance. While you can add a cosigner to your application, you will not be able to remove them. You can find out your potential rate through prequalification, but the lender doesn't disclose its minimum credit score or income requirements.

pros

Doesn’t charge loan prepayment, origination, application, or late payment fees
Borrowers can get free financial planning advice, referral bonuses, and discounts
Offers a wide range of repayment plans

cons

Doesn’t allow cosigner release
Must have at least $5,000 in loans to refinance

Interest rates

Fixed or variable

Minimum credit score

Does not disclose

Minimum income

Does not disclose

Loan terms

5, 7, 10, 15, or 20 years

Loan amounts

$5,000 - full outstanding balance

Cosigner release

None

Eligibility

Must be a U.S. citizen or permanent resident. Must have made 6 on-time payments in the past 6 months, with no record of default, delinquency, bankruptcy, or foreclosure in the last five years. Employment is required, or you must have a job offer starting within 90 days. Must also have attended a Title IV-eligible school.

Read full review

4.4

Credible rating

4.88% -

$10,000 up to total refinance amount

680

Check Rates

on Credible’s website

View Details

Overview

ELFI offers student loan refinancing to borrowers who graduated with a bachelor's degree or higher. Borrowers can even refinance their parents' PLUS loans in their own name. Plus, each ELFI borrower gets paired with a student loan adviser to help them through the refinancing process.

While borrowers can add a cosigner to their application, they can't release that cosigner later on. ELFI also doesn't offer rate discounts, but borrowers can apply for a forbearance of up to 12 months if they're experiencing financial hardship.

pros

Doesn’t charge application or origination fees
Borrowers are assigned to a student loan adviser
Student borrowers can refinance parent PLUS loans in their name
Clear credit and income requirements
Offers financial hardship forbearance of up to 12 months

cons

Doesn’t offer any discounts
Need at least a bachelor’s degree to refinance
Doesn’t offer cosigner release
Charges fees for late and returned payments

Interest rates

Fixed and variable

Minimum credit score

680

Minimum income

$35,000

Loan terms

5, 7, 10, 15, or 20 years for student loan refinancing; 5, 7, or 10 years for parent loan refinancing

Loan amounts

Minimum of $10,000 with no set maximum.

Cosigner release

None

Eligibility

Must be a U.S. citizen or permanent resident with a bachelor’s degree or higher. Must have at least $10,000 in student loans to refinance and a minimum credit history of 36 months.

Read full review

4.6

Credible rating

4.89% -

$5,000 - $250,000

680

Check Rates

on Credible’s website

View Details

Overview

LendKey is a marketplace that connects borrowers with more than 300 community banks and credit unions to find the best student loan refinancing options. Unlike most lenders, LendKey allows you to refinance your student loans while you're still in school, as long as you've earned at least an associate degree.

One of LendKey's biggest advantages is that it can help you compare multiple loan offers in one place. However, specific loan terms and eligibility requirements will vary by lender. Basic eligibility criteria include a minimum credit score of 680 and at least $5,000 in outstanding debt to refinance.

pros

You can refinance with just an associate degree
Can earn a $200 bonus for referring friends and family
Lower your rate by a quarter of a percentage point with autopay
No fees for applications or loan origination

cons

Some lenders may require membership in a credit union or local bank
Loan terms and qualifications vary by lender

Interest rates

Fixed or variable

Minimum credit score

680

Minimum income

Does not disclose

Loan terms

5, 7, 10, or 15 years

Loan amounts

$5,000 to $250,000

Cosigner release

Varies based on lender's terms

Eligibility

Must be a U.S. citizen or permanent resident and have already graduated with at least an associate degree from one of LendKey lenders’ eligible institutions.

Read full review

3.9

Credible rating

5.12% -

$5,000 - $250,000

670

Check Rates

on Credible’s website

View Details

Overview

INvestEd is a nonprofit based in Indiana that offers student loan refinancing to borrowers nationwide. It offers competitive rates and a discount for setting up autopay. INvestEd also allows cosigners to be released after 12 on-time payments, which is sooner than some other student loan refinancing lenders.

However, the most you can refinance through INvestEd is $250,000, less than what other lenders may allow. It also has strict credit and income requirements to qualify, or you'll need an eligible cosigner. INvestEd clearly defines its credit requirements before you apply, but you can't prequalify with a soft credit check.

pros

Refinancing available even for non-degree holders
Offers a one-quarter percentage point rate discount for autopay
Deferment available while in school, military service or under financial hardship
Will release cosigners after as few as 12 payments

cons

Relatively low maximum refinance amount compared with some competitors
Doesn’t offer prequalification to see rates before you apply
No refinancing available for international students
Parent loans cannot be refinanced in student’s name

Interest rates

Fixed or variable

Minimum credit score

670

Minimum income

Does not disclose

Loan terms

5, 10, 15, or 20 years

Loan amounts

$5,000 to $250,000

Cosigner release

12 months

Eligibility

U.S. citizens or permanent residents are eligible. Borrowers must meet minimum requirements including a FICO score of 670 or higher, annual income of $36,000, a debt-to-income ratio below 40% to 50%, a year of continuous employment, and no defaults or serious collection activities in recent years.

Read full review

4.7

Credible rating

5.89% -

$10,000 - $750,000

Does not disclose

Check Rates

on Credible’s website

View Details

Overview

Citizens student loan refinancing is available to qualified borrowers who want to refinance at least $10,000.

Borrowers who earned undergraduate degrees can refinance as much as $300,000 in student loans. Those who borrowed for graduate or professional degrees can refinance from $500,000 to $750,000. Citizens refinancing loans are available with fixed or variable rates. Repayment terms are flexible, ranging from five to 20 years.

Medical residents can refinance student loans and only pay $100 per month for up to four years while completing residency or fellowship.

pros

Range of repayment options between 5 and 20 years
Offers prequalification with no impact on credit score
Offers rate discounts for existing customers and autopay

cons

Cosigners not eligible for release until after 36 payments are made
Refinancing unavailable until you make 12 payments on your loans if you earned an associate degree or no degree at all
Minimum loan amounts are higher than some other lenders

Interest rates

Fixed or variable

Minimum credit score

Does not disclose

Minimum income

Does not disclose

Loan terms

5, 7, 10, 15, or 20 years

Loan amounts

$10,000 minimum, with a maximum of $300,000 for bachelor’s degree or below; $500,000 for graduate degrees; and $750,000 for professional degrees

Cosigner release

36 months

Eligibility

Must refinance at least $10,000 in student loans and be a U.S. citizen, permanent resident, or resident alien with a valid U.S. Social Security number. Must have earned at least a bachelor's degree to qualify.

Read full review

3.8

Credible rating

6.00% -

$7,500 - $200,000

700

Check Rates

on Credible’s website

View Details

Overview

EdvestinU offers student loan refinancing through Granite Edvance Corporation, a New Hampshire-based nonprofit. The lender stands out with competitive interest rates and flexible repayment terms for borrowers with strong credit. To qualify, you'll need a credit score of at least 700 and an annual income of $30,000 for loans less than $100,000 or $50,000 for larger amounts. However, loans aren't available in all U.S. states.

Unlike many lenders, EdvestinU lets you refinance without a degree or while still enrolled in school. New Hampshire residents also receive a 1.5 percentage point interest rate reduction, making it an excellent option for those in the state.

pros

You can refinance without a degree or while enrolled in school
Autopay rate discount available
New Hampshire residents save 1.5 percentage points on their interest rate

cons

Refinancing is only available in select states
High minimum credit score requirement
Requires a higher minimum loan balance than some lenders
Cosigner release requires 2 years of on-time payments

Interest rates

Fixed or variable

Minimum credit score

700

Minimum income

Does not disclose

Loan terms

5, 10, 15, or 20 years

Loan amounts

$7,500 to $200,000

Cosigner release

24 months

Eligibility

U.S. citizens or permanent residents who are at least 18 years old and reside in Alaska, Arkansas, Colorado, Connecticut, Florida, Maine, Massachusetts, Nebraska, New Hampshire, New Jersey, New York, North Carolina, Puerto Rico, Rhode Island, Texas, Utah, Virginia, Washington, West Virginia, and Wisconsin.

Read full review

Credible rating

6.20% -

$10,000 up to the total amount

670

Check Rates

on Credible’s website

View Details

Overview

Massachusetts Educational Financing Authority (MEFA) is a student refinancing lender offering a wide range of options, including to borrowers who didn't finish school. Though the lender doesn't offer variable-rate options, its fixed-rate loans have competitive rates.

MEFA's mission is to provide affordable student loans, and it doesn't charge any fees. You must have at least $10,000 in student loans to refinance, and you must have made a minimum of six consecutive on-time payments over the last six months. Borrowers who are unable to qualify on their own can add a cosigner to their application.

pros

You can refinance without having graduated
Doesn’t charge fee
Can prequalify to check your rate

cons

Can’t release a cosigner
Doesn’t have any discounts
Can’t refinance parent student loans
Doesn’t offer variable-rate loans

Interest rates

Fixed

Minimum credit score

670

Minimum income

Does not disclose

Loan terms

7, 10, or 15 years

Loan amounts

$10,000 up to your total debt

Cosigner release

None

Eligibility

Must be a U.S. citizen or permanent resident who is the primary borrower on education debt used to attend an eligible college or university. Must have made six on-time loan payments over the most recent six months. Must have no history of default or delinquency on education debt for the past 12 months and no history of bankruptcy or foreclosure in the past five years.

Read full review

3.7

Credible rating

6.34% -

$7,500 - $250,000

680

Check Rates

on Credible’s website

View Details

Overview

The Rhode Island Student Loan Authority (RISLA) is a nonprofit lender offering student loan refinancing to borrowers across the U.S. You can refinance even if you didn't complete your degree, as long as you have at least $7,500 in student loan debt.

What makes RISLA unique is the flexibility it offers borrowers. If you're facing financial difficulties, RISLA provides income-based repayment options to help manage your payments. For added relief, you can access up to 24 months of forbearance, which is more than many lenders offer. If you return to graduate school, you can defer your payments for up to three years, giving you time to focus on your studies without worrying about loan payments.

pros

Offers income-based repayment
Generous payment relief options
You can refinance without a degree
Get a rate discount when you enroll in autopay

cons

High minimum income requirement
No cosigner release option
Fewer repayment terms to choose from
Does not offer variable rates

Interest rates

Fixed

Minimum credit score

680

Minimum income

$40,000

Loan terms

5, 10, or 15 years

Loan amounts

$7,500 minimum up to of $250,000, depending on degree

Cosigner release

None

Eligibility

Borrower or cosigner must meet credit requirements. Student must be a U.S. citizen or permanent resident and have used original student loans to attend an eligible degree-granting institution.

Read full review

4.44.4

Credible rating

Fixed (APR)

3.85% -

Loan Amounts

$10,000 - $400,000

Min. Credit Score

720

Check Rates

on Credible’s website

View Details

Overview

pros

Five loan terms available
Competitive rates
Cosigner release
No origination or application fees
Autopay discount of 0.25 percentage points

cons

Only available to Texas residents
High minimum credit and income requirements
Bachelor’s degree required

Interest rates

Fixed or variable

Minimum credit score

720

Minimum income

$60,000

Loan terms

5, 7, 10, 15, or 20 years

Loan amounts

$10,000 minimum, up to $150,000 for bachelor’s degrees and $400,000 for graduate, medical, law, or other professional degrees

Cosigner release

Yes, after 24 on-time payments

Eligibility

Borrower must be a Texas resident and a U.S. citizen or permanent resident who has a bachelor’s degree or higher.

Read full review

4.54.5

Credible rating

Fixed (APR)

- ¹

Loan Amounts

$5,000 up to the full balance

Min. Credit Score

650

Check Rates

on Credible’s website

View Details

Overview

pros

Doesn’t charge loan prepayment, origination, application, or late payment fees
Borrowers can get free financial planning advice, referral bonuses, and discounts
Offers a wide range of repayment plans

cons

Doesn’t allow cosigner release
Must have at least $5,000 in loans to refinance

Interest rates

Fixed or variable

Minimum credit score

Does not disclose

Minimum income

Does not disclose

Loan terms

5, 7, 10, 15, or 20 years

Loan amounts

$5,000 - full outstanding balance

Cosigner release

None

Eligibility

Read full review

4.44.4

Credible rating

Fixed (APR)

4.88% -

Loan Amounts

$10,000 up to total refinance amount

Min. Credit Score

680

Check Rates

on Credible’s website

View Details

Overview

pros

Doesn’t charge application or origination fees
Borrowers are assigned to a student loan adviser
Student borrowers can refinance parent PLUS loans in their name
Clear credit and income requirements
Offers financial hardship forbearance of up to 12 months

cons

Doesn’t offer any discounts
Need at least a bachelor’s degree to refinance
Doesn’t offer cosigner release
Charges fees for late and returned payments

Interest rates

Fixed and variable

Minimum credit score

680

Minimum income

$35,000

Loan terms

5, 7, 10, 15, or 20 years for student loan refinancing; 5, 7, or 10 years for parent loan refinancing

Loan amounts

Minimum of $10,000 with no set maximum.

Cosigner release

None

Eligibility

Must be a U.S. citizen or permanent resident with a bachelor’s degree or higher. Must have at least $10,000 in student loans to refinance and a minimum credit history of 36 months.

Read full review

4.64.6

Credible rating

Fixed (APR)

4.89% -

Loan Amounts

$5,000 - $250,000

Min. Credit Score

680

Check Rates

on Credible’s website

View Details

Overview

pros

You can refinance with just an associate degree
Can earn a $200 bonus for referring friends and family
Lower your rate by a quarter of a percentage point with autopay
No fees for applications or loan origination

cons

Some lenders may require membership in a credit union or local bank
Loan terms and qualifications vary by lender

Interest rates

Fixed or variable

Minimum credit score

680

Minimum income

Does not disclose

Loan terms

5, 7, 10, or 15 years

Loan amounts

$5,000 to $250,000

Cosigner release

Varies based on lender's terms

Eligibility

Must be a U.S. citizen or permanent resident and have already graduated with at least an associate degree from one of LendKey lenders’ eligible institutions.

Read full review

3.93.9

Credible rating

Fixed (APR)

5.12% -

Loan Amounts

$5,000 - $250,000

Min. Credit Score

670

Check Rates

on Credible’s website

View Details

Overview

pros

Refinancing available even for non-degree holders
Offers a one-quarter percentage point rate discount for autopay
Deferment available while in school, military service or under financial hardship
Will release cosigners after as few as 12 payments

cons

Relatively low maximum refinance amount compared with some competitors
Doesn’t offer prequalification to see rates before you apply
No refinancing available for international students
Parent loans cannot be refinanced in student’s name

Interest rates

Fixed or variable

Minimum credit score

670

Minimum income

Does not disclose

Loan terms

5, 10, 15, or 20 years

Loan amounts

$5,000 to $250,000

Cosigner release

12 months

Eligibility

Read full review

4.74.7

Credible rating

Fixed (APR)

5.89% -

Loan Amounts

$10,000 - $750,000

Min. Credit Score

Does not disclose

Check Rates

on Credible’s website

View Details

Overview

Citizens student loan refinancing is available to qualified borrowers who want to refinance at least $10,000.

Medical residents can refinance student loans and only pay $100 per month for up to four years while completing residency or fellowship.

pros

Range of repayment options between 5 and 20 years
Offers prequalification with no impact on credit score
Offers rate discounts for existing customers and autopay

cons

Cosigners not eligible for release until after 36 payments are made
Refinancing unavailable until you make 12 payments on your loans if you earned an associate degree or no degree at all
Minimum loan amounts are higher than some other lenders

Interest rates

Fixed or variable

Minimum credit score

Does not disclose

Minimum income

Does not disclose

Loan terms

5, 7, 10, 15, or 20 years

Loan amounts

$10,000 minimum, with a maximum of $300,000 for bachelor’s degree or below; $500,000 for graduate degrees; and $750,000 for professional degrees

Cosigner release

36 months

Eligibility

Read full review

3.83.8

Credible rating

Fixed (APR)

6.00% -

Loan Amounts

$7,500 - $200,000

Min. Credit Score

700

Check Rates

on Credible’s website

View Details

Overview

pros

You can refinance without a degree or while enrolled in school
Autopay rate discount available
New Hampshire residents save 1.5 percentage points on their interest rate

cons

Refinancing is only available in select states
High minimum credit score requirement
Requires a higher minimum loan balance than some lenders
Cosigner release requires 2 years of on-time payments

Interest rates

Fixed or variable

Minimum credit score

700

Minimum income

Does not disclose

Loan terms

5, 10, 15, or 20 years

Loan amounts

$7,500 to $200,000

Cosigner release

24 months

Eligibility

Read full review

Credible rating

Fixed (APR)

6.20% -

Loan Amounts

$10,000 up to the total amount

Min. Credit Score

670

Check Rates

on Credible’s website

View Details

Overview

pros

You can refinance without having graduated
Doesn’t charge fee
Can prequalify to check your rate

cons

Can’t release a cosigner
Doesn’t have any discounts
Can’t refinance parent student loans
Doesn’t offer variable-rate loans

Interest rates

Fixed

Minimum credit score

670

Minimum income

Does not disclose

Loan terms

7, 10, or 15 years

Loan amounts

$10,000 up to your total debt

Cosigner release

None

Eligibility

Read full review

3.73.7

Credible rating

Fixed (APR)

6.34% -

Loan Amounts

$7,500 - $250,000

Min. Credit Score

680

Check Rates

on Credible’s website

View Details

Overview

pros

Offers income-based repayment
Generous payment relief options
You can refinance without a degree
Get a rate discount when you enroll in autopay

cons

High minimum income requirement
No cosigner release option
Fewer repayment terms to choose from
Does not offer variable rates

Interest rates

Fixed

Minimum credit score

680

Minimum income

$40,000

Loan terms

5, 10, or 15 years

Loan amounts

$7,500 minimum up to of $250,000, depending on degree

Cosigner release

None

Eligibility

Borrower or cosigner must meet credit requirements. Student must be a U.S. citizen or permanent resident and have used original student loans to attend an eligible degree-granting institution.

Read full review

All APRs reflect autopay and loyalty discounts where available | LightStream disclosure | SoFi Disclosures | Read more about Rates and Terms

What types of loans can I consolidate?

Only federal student loans are eligible for Direct Loan consolidation. Private student loans are not eligible. Some loan types you can consolidate include:

Direct Subsidized and Unsubsidized Loans
Direct PLUS Loans
FFEL subsidized and unsubsidized loans
FFEL PLUS loans
Federal Perkins Loans
Nursing Student Loans
Nurse Faculty Loans
Health Education Assistance Loans
Health Professions Student Loans
Loans for Disadvantaged Students
FFEL Consolidation loans and Direct Consolidation Loans (under certain conditions)

Note that federal parent loans are eligible for consolidation, but you can’t consolidate them with a loan that the student borrowed themselves.

Should I consolidate my student loans?

If your goal is to combine multiple loans into one to simplify repayment, loan consolidation could make sense. It can also make certain loan types eligible for income-driven repayment, which can make your monthly payments more affordable. Plus, IDR plans are the only repayment options eligible for loan forgiveness through PSLF.

However, loan consolidation may not be the right move if you have a lot of outstanding interest on your loans. That interest will capitalize, thereby increasing your cost of borrowing. If you can pay off your unpaid interest before you consolidate, you could prevent it from capitalizing.

The bottom line is, loan consolidation can help you manage your payments more easily and lower your monthly bill, but in some cases it can make your student loans more expensive.

Check Out: Is Student Loan Consolidation Right for Me?

How to apply for a Direct Consolidation Loan

There’s no cost to apply for a Direct Consolidation Loan, and you can submit your application on the Federal Student Aid website. It generally takes 30 minutes or less to fill out the form. You’ll need to provide your personal and financial information, as well as details about your loans.

During this process, you can also select your preferred repayment plan. Federal Student Aid’s loan simulator tool can help you compare your options and estimate your monthly payments and total interest charges on each plan.

Learn More: How To Consolidate Student Loans

Can I consolidate defaulted loans?

Federal loan consolidation is one way to get defaulted student loans back into good standing. If you go this route, you’ll have to either:

Agree to pay your new Direct Consolidation Loan on an income-driven repayment plan, or
Make three consecutive, on-time payments on your defaulted loan before you consolidate it

Through September 2024, however, borrowers have a simpler option for getting out of default with the Fresh Start program. This temporary program makes it easy to get your loans out of default online or over the phone. Fresh Start will also restore your access to federal financial aid and remove the record of default on your credit report.

Meet the expert:

Rebecca Safier

Rebecca Safier has more than eight years of experience in personal finance. Her work has been featured by CNN, U.S. News & World Report, New York Post, USA TODAY Blueprint, and Buy Side WSJ.