How To Consolidate Your Student Loans

Jessica Martinsen

In order to qualify for Public Service Loan Forgiveness (PSLF) and income-driven repayment (IDR) plans, you must have direct student loans such as: 

-Direct Subsidized Loans

-Direct Unsubsidized Loans

-Direct PLUS Loans (Parent Plus)

-Direct Stafford Loans

-Direct Consolidation Loans

If you do not have one or more of the loans listed above, you will need to consolidate your loans into one direct consolidation student loan to be eligible for PSLF and IDR plans. Once you consolidate your loans, you will have a fixed interest rate based on the average of the interest rates on the loans being consolidated, and you will have a single monthly payment for the new Direct Consolidation Loan instead of multiple monthly payments on the loans you consolidated. 

How to apply for consolidation:

  • You can consolidate your loans online via the Federal Student Aid website. To make it easy for you, we put together a quick step-by-step guide for how to consolidate your student loans. Click on the messager button at the bottom of your screen to request this downloadable PDF guide.
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  • It is important to note, you will need to choose a repayment plan for your new direct consolidation loan. If you’re not sure which repayment plan is best for you, Chipper can help you decide! Through our Discover Tool, you can review the plans and programs you’re eligible for. Click here to discover your student loan options.
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IMPORTANT:

  • If you’re consolidating your loans for the purpose of PSLF, you must choose one of the four income-driven repayment plans. For your choice of loan servicer, choose Fedloan since they are the only loan servicer that accepts PSLF applications. If you’re not consolidating for the purpose of PSLF, you can choose your existing loan servicer.

Loan types explained:

  • It can be pretty confusing to determine if your loans qualify for the plans and programs you want to pursue. That is why we put together a list of the loans that qualify for the income-driven repayment plans, and the Public Service Loan Forgiveness and Teacher Loan Forgiveness (TLF) programs. If you don’t have the loans listed below needed for the plan and/or program you want to apply for, you will probably need to consolidate your loans.

Loans accepted for IDR plans:

  • In general, loans that qualify for all four IDR plans include:
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  • -Direct Subsidized Loans
  • -Direct Unsubsidized Loans
  • -Direct PLUS Loans made to graduate or professional students
  • -Direct Consolidation Loans that did not repay any PLUS loans made to parents
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  • However, the different IDR plans accept some loan types over the others. Below is a list of the eligible if consolidated for each IDR plan as well as the loan types that are not eligible for each IDR plan.
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REPAYE Plan:
LOANS ELIGIBLE IF CONSOLIDATED
-Subsidized Federal Stafford Loans (from the FFEL Program)
-Unsubsidized Federal Stafford Loans (from the FFEL Program)
-FFEL PLUS Loans made to graduate or professional students
-FFEL Consolidation Loans that did not repay any PLUS loans made to parents
-Federal Perkins Loans
 
LOANS NOT ELIGIBLE
-Direct PLUS Loans made to parents
-Direct Consolidation Loans that repaid PLUS loans made to parents
-FFEL PLUS Loans made to parents
-FFEL Consolidation Loans that repaid PLUS loans made to parents
 
PAYE Plan:
LOANS ELIGIBLE IF CONSOLIDATED
-FFEL PLUS Loans made to graduate or professional students
-FFEL Consolidation Loans that did not repay any PLUS loans made to parents
-Federal Perkins Loans
-Subsidized Federal Stafford Loans (from the FFEL Program)
-Unsubsidized Federal Stafford Loans (from the FFEL Program)
-FFEL PLUS Loans made to graduate or professional students
-FFEL Consolidation Loans that did not repay any PLUS loans made to parents
-Federal Perkins Loans
 
LOANS NOT ELIGIBLE
-Direct PLUS Loans made to parents
-Direct Consolidation Loans that repaid PLUS loans made to parents
-FFEL Consolidation Loans that repaid PLUS loans made to parents
-Direct PLUS Loans made to parents
 
IBR Plans:
IBR accepts more loan types than REPAYE and PAYE. There are two IBR plans (2009, if you took out loans before 2009) and (2014, if you took out loans after 2014).
 
LOANS ELIGIBLE
-Direct Subsidized Loans
-Direct Unsubsidized Loans
-Direct PLUS Loans made to graduate or professional students
-Direct Consolidation Loans that did not repay any PLUS loans made to parents
-Subsidized Federal Stafford Loans (from the FFEL Program)
-Unsubsidized Federal Stafford Loans (from the FFEL Program)
-FFEL PLUS Loans made to graduate or professional students
-FFEL Consolidation Loans that did not repay any PLUS loans made to parents
 
LOANS ELIGIBLE IF CONSOLIDATED*
-Federal Perkins Loans
 
LOANS NOT ELIGIBLE
-Direct PLUS Loans made to parents
-Direct Consolidation Loans that repaid PLUS loans made to parents
-FFEL PLUS Loans made to parents
-FFEL Consolidation Loans that repaid PLUS loans made to parents
 
ICR Plan:
ICR is the only IDR plan that Parent PLUS loan borrowers can apply for.
 
LOANS ELIGIBLE IF CONSOLIDATED*
-Direct PLUS Loans made to parents
-Subsidized Federal Stafford Loans (from the FFEL Program)
-Unsubsidized Federal Stafford Loans (from the FFEL Program)
-FFEL PLUS Loans made to graduate or professional students
-FFEL PLUS Loans made to parents
-FFEL Consolidation Loans that did not repay any PLUS loans made to parents
-FFEL Consolidation Loans that repaid PLUS loans made to parents
-Federal Perkins Loans
 
 

Loans accepted for PSLF:

  • Must have Direct loans:
  • -Direct Subsidized Loans
  • -Direct Unsubsidized Loans
  • -Direct PLUS Loans (Parent Plus)
  • -Direct Stafford Loans
  • -Direct Consolidation Loans
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  • FFEL loans and Perkins loans do NOT qualify, but can become eligible for PSLF if these loans are consolidated into a direct consolidation loan.
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Loans accepted for TLF:

  • Must have:
  • -Direct Subsidized Loans
  • -Direct Unsubsidized Loans
  • -Subsidized Federal Stafford Loans
  • -Unsubsidized Federal Stafford Loans
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  • Must not have had an outstanding balance on Direct Loans or Federal Family Education Loan (FFEL) Program loans as of Oct. 1, 1998, or on the date that a borrower obtained a Direct Loan or FFEL Program loan after Oct. 1, 1998.
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  • Still confused or not sure which repayment plan and/or forgiveness program is best for you? Chipper can guide you through the process for free! Simply, sync your loans with us and we’ll display the plans and programs you qualify for! 

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View your IDR and forgiveness options here