Consolidating your student loans
You’ll need to provide documentation of your monthly income and expenses, including a completed form.Depending on your individual circumstances, this alternative payment amount may be lower than the payment amount you were initially offered.However, your credit history will still show late payments that were reported by your loan holder before the loan went into default.
If you choose to repay the new Direct Consolidation Loan under an income-driven plan, you must select one of the available income-driven repayment plans at the time you apply for the consolidation loan and provide documentation of your income.
Late payments will remain on your credit report for seven years from when they were first reported.
It’s important that you fully understand loan rehabilitation and loan consolidation before making your decision.
To rehabilitate your loan, you must choose one of the two payment amounts.
Your loan holder may be collecting payments on your defaulted loan through wage garnishment or Treasury offset (taking all or part of your tax refunds or other government payments).
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.