Consolidating student loans through department education

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.Once you have made the required nine payments, your loans will no longer be in default.To rehabilitate a defaulted Federal Perkins Loan, you must make a full monthly payment each month, within 20 days of the due date, for nine consecutive months.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).While loan rehabilitation takes several months to complete, you can quickly apply for loan consolidation.

If you’re not sure who your loan holder is, you can log in to “My Federal Student Aid” to get your loan holder’s contact information.

That cell of the table has now been corrected to indicate that loan consolidation will not result in removal of the record of default from the borrower’s credit history.

If you rehabilitate a defaulted loan, the record of the default will be removed from your credit history.

Loan consolidation allows you to pay off one or more federal student loans with a new consolidation loan.

To consolidate a defaulted federal student loan into a new Direct Consolidation Loan, you must either Note: If you choose to make three payments on the defaulted loan before you consolidate it, the required payment amount will be determined by your loan holder, but cannot be more than what is reasonable and affordable based on your total financial circumstances.

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