Consolidating direct federal student loans
Of course, there are also downsides to consolidation.
To consolidate under the Direct Consolidation Loan program, you must have at least one(the period of time after your graduate, leave school, or drop below half-time enrollment when you are not required to make payments on certain federal student loans) or in a repayment period (including loans that are in a forbearance or deferment period.)Federal Family Education Loan (FFEL) program: Under the FFEL program, private lenders gave loans to students that the federal government guaranteed. For example, Direct Subsidized Loans, Direct Unsubsidized Loans, Direct PLUS Loans, and Direct Consolidation Loans are types of Direct Loans.
Defaulted loans can be included in the consolidation, but there are some special requirements.
Consolidating your federal student loans under the Direct Consolidation Loan program is one way to get out of default, though you must:make satisfactory repayment arrangements with the current loan holder before consolidating (which usually this means making three consecutive, voluntary, on-time, full monthly payments); oragree to repay the new Direct Consolidation Loan under either the Income Contingent Repayment Plan, the Pay As You Earn Repayment Plan, or Income-Based Repayment Plan.
You then went back to school, took out new student loans, and received an in-school deferment on your previous loans that had had entered into the repayment period.
You can apply for a Direct Consolidation Loan for the loans that are in an in-school deferment status.