Consolidating federal education loans

These involuntary payments may continue even after you begin making payments under a loan rehabilitation agreement, but they can’t be counted toward the required nine voluntary loan rehabilitation payments.

Involuntary payments may continue to be taken until your loan is no longer in default or until you have made some of your rehabilitation payments.

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.

Unless you make three voluntary, on-time, full monthly payments on a defaulted loan before you consolidate it, your choice of repayment plans for the new will be limited to one of the income-driven repayment plans.You must provide documentation of your income to your loan holder.If you can’t afford the initial monthly payment amount described above, you can ask your loan holder to calculate an alternative monthly payment based on the amount of your monthly income that remains after reasonable amounts for your monthly expenses have been subtracted.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).

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