Even if you have only one defaulted student loan, you may obtain a Direct Consolidation Loan to resolve the default.
In the process of consolidation, each original loan is paid in full and a new Direct Consolidation Loan is originated for the combined balance of the consolidated loans.
These types of federal student loan debt can be consolidated: Neither type of federal consolidation loan can be used for private student loans.
One way to resolve a defaulted loan is to combine your existing federal student loans into a new Direct Consolidation Loan from the US Department of Education (ED).
But your nonfederal education loan—such as the Vermont Advantage Loan—will remain with its current lender.
In certain situations, your student loan may be forgiven, cancelled, or discharged.
Thankfully, the federal government provides a range of debt relief solutions that can help you: The information below can help you understand how to consolidate your student loans.
This federal program lets you combine multiple federal student loans into 1 new loan—with 1 monthly payment.
Consolidating your federal student loans may help you to stay on track with your monthly payments and avoid the risk of student loan default—which can have serious consequences on your credit and your income. Once you log in, you can fill out a free loan consolidation application online—or download the paper application to fill out and send in by mail.
You can only consolidate federal, not private, student loans through this program.
(Note: You cannot consolidate federal and private student loans together through the federal government, either.) You can consolidate an existing Direct Consolidation Loan so long as you have a new eligible loan with which it can be consolidated.