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If you’re struggling with making multiple loan payments to different lenders/servicers each month, loan consolidation may be right for you. 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.
Here’s what you should know about loan consolidation:
To get started, go to StudentLoans.gov. 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.
Keep in mind:
If you have both federal and nonfederal loans, you will likely still have more than 1 servicer after loan consolidation. Your federal loans will move to 1 new consolidated loan under 1 servicer. 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. This means you no longer have to pay back the money that you borrowed—and your debt is erased.
Loan forgiveness is reserved for very specific situations, such as if:
To take advantage of this option, you must qualify for a specific loan forgiveness program such as Teacher Loan Forgiveness or Total and Permanent Disability. To learn more, visit the U.S. Department of Education’s Federal Student Aid website.
Unfortunately, there are companies that prey on people who need help with their student loans—and try to make money off of them. You should never pay for help with a loan consolidation or forgiveness. Your lender will help you for free.