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Student loan debt is the leading debt of consumers in America.  In a recent article in American Banker, student loan debt is at an all time high reaching 1 trillion dollars. According to the Wall Street Journal, 26 million consumers have two or more student loans on their credit report.  Also according to Forbes over 15% of student loans that were issued during 2010 through 2012 are at least 90 days past due.  Student loan debt is one that cannot be discharged in bankruptcy.

  • How Do I Benefit?
    Consolidation loans allow borrowers to combine one or more of their Federal education loans into a new loan that offers several advantages.

    • One Lender and One Monthly Payment – With one lender and one monthly payment due for student loans, it is easier than ever for borrowers to manage their debt.  Borrowers have only one lender for all loans included in a Direct Consolidation Loan.
    • Flexible Payment Options – Borrowers can choose from multiple repayment plans with various term selections that meet the different and changing needs of each individual.  The multiple repayments plans include: Income Based Repayment Plan, Income Contingent Repayment Plan, Pay as You Earn Repayment Plan, Standard Repayment Plan and Graduated Repayment Plan.  With a consolidation loan, borrowers can change repayment plans at anytime.  If you select the IBR plan and want to change at a later date, your only option will be the Standard Repayment Plan.
    • No Minimum or Maximum Loan Amounts– There is no minimum amount required to qualify for a Direct Consolidation Loan.
    • Reduced Monthly Payments – A consolidation loan may ease the strain on a borrower’s budget by lowering the borrower’s overall monthly payment.  The minimum monthly payment on a consolidation loan may be lower than the combined monthly payments of all the borrowers Federal Student Loans together.

    Should I Consolidate?

    • If you send payments to more than one lender every month, and want the convenience of a single monthly payment, consolidation may be right for you.
    • If you have trouble meeting your monthly payments, have exhausted your deferment and forbearance options, and/or want to avoid default, consolidation may be right for you.

    What Types of Loans Are Eligible?

    • Subsidized Loans
    • Subsidized Federal Stafford Loans
    • Direct Subsidized Loans
    • Subsidized Federal Consolidation Loans
    • Direct Subsidized Consolidation Loans
    • Federal Insured Student Loans (GSL)
    • Guaranteed Student Loans (GSL)
    • Unsubsidized Loans – Unsubsidized and Nonsubsidized Federal Stafford Loans
    • Direct Unsubsidized Loans, including Direct Unsubsidized Loans (Teach) (Converted from Teach Grants)
    • Unsubsidized Federal Consolidation Loans
    • Direct Unsubsidized  Consolidation Loans
    • Federal Plus Loans (For parents or for graduate and professional students)
    • Direct Plus Loans (For parents or for graduate and professional students)
    • Direct Plus Consolidation Loans
    • Federal Perkins Loans
    • National Direct Student Loans (NDSL)
    • National Defense Student Loans (NDSL)
    • Federal Supplemental Loans for Students (SLS)
    • Parent Loans for Undergraduate Students (PLUS)
    • Auxiliary Loans to Assist Students (ALAS)
    • Health Professions Student Loans (HPSL)
    • Health Education Assistance Loans (HEAL)
    • Nursing Student Loans (NSL)
    • Loans for Disadvantage Students (LDS)

    Who Is Not Eligible?

    • Borrowers cannot consolidate if the loan status indicates “in school”
    • Borrowers cannot consolidate if the loan is a PRIVATE LOAN
    • Borrowers cannot consolidate if the loan status indicates “default or garnishment”
      • There is a separate program available for borrowers whose loans are in this particular status.  Borrowers will have the option to rehabilitate the loans and then ultimately finish with a Consolidation


    There are numerous programs available with a Consolidation depending upon the borrower’s occupation.  Inside these programs is the possibility of having all or a portion of your student loans forgiven and or canceled.

    • Public Education
    • Law Enforcement
    • Public Health
    • Public Service: Fire Fighters

    One of the most beneficial programs is the Student Loan Forgiveness Program.  The student loan forgiveness program was created by Congress through the College Cost Reduction and Access Act of 2007.  Congress created this program to encourage individuals to enter and continue to work full-time in public service jobs.  Under this program, borrowers may qualify for forgiveness of the remaining balance on their eligible federal student loans after they have made 120 payments.  The 120 payments have to be made under certain repayment plans and on eligible federal student loans beginning after October 1, 2007.  The types of public service jobs that will qualify for this Student Loan Forgiveness Program are:

    •  A federal, state, local, or tribal government organization, agency, or entity (includes most public schools, colleges and universities)
    • A public or family service agency
    • A non-profit organization under section 501(C)(3) of the Internal Revenue Code that is exempt from taxation under 501(a) of the Internal Revenue Code (includes mot non-profit private schools, college and universities); A Tribal college or university; or A organization that is not a for-profit business, a labor union, a partisan political organization, or an organization engaged in religious activities
    • Emergency Management
    • Military
    • Law Enforcement
    • Public Interest Law Services
    • Early Childhood Education (including licensed or regulated health care, Head Start, and state-funded pre-kindergarten)
    • Public Service for individuals with disabilities and the elderly
    • Public Health (including nurses, nurse practitioners, nurses in a clinical setting, and full-time professionals engaged in health care practitioner occupations and health care support occupations)
    • Public Education
    • Public Library services; and School Library or other school based services