Federal Student Loans

How to Apply For Federal Student Loan Consolidation and Repayment Plans

If you have federal student loans, you likely already know that you can consolidate them and apply for an income-driven repayment plan to make it easier to pay off. Once you’ve decided that one or the other is the right decision for you, you’ll want to make sure you qualify, then go through the application process. Read on to learn more about how you can apply for federal student loan consolidation and repayment plans and take advantage of federal student loan benefits.

How to apply for federal student loan consolidation

Consolidating your student loans can help simplify your finances. “By consolidating student loans, the borrower is simplifying the repayment process by now only having one payment to make each month instead of several,” says Ross Riskin, founder of the American Institute of Certified College Financial Consultants.

“It does not mean a reduction in the overall payment will take place because a weighted average interest rate is calculated for the new loan,” he adds. “The new single payment should be equal or even slightly higher.”

Consolidating your federal student loans can also make them eligible for income-driven repayment plans if they didn’t qualify before.

Make sure you qualify

You can only consolidate federal student loans through the Department of Education. They can be Direct Loans or FFEL Program loans. You can consolidate one or more loans at a time, and the loans must be in repayment or the grace period.

If you’re looking to consolidate a loan that’s in default, you must do one of the following before you can apply to consolidate it:

Once you’re sure that your loans qualify, it’s time for the next step.

Federal student loan consolidation

You can fill out and submit your consolidation application through the Department of Education in two ways: online or by snail mail. If you choose to apply online, start by going to StudentLoans.gov. There, you’ll log into your federal student aid (FSA) account.

If you don’t have one, you’ll need to create one. You’ll need the following information:

  • Name
  • Date of birth
  • Social Security Number
  • Mailing address
  • Email address

You may need to wait a day or two for the Social Security Administration to verify your identity. Once that’s done, you can start the consolidation application.

To start, you’ll choose which loan or loans you want to consolidate.

You’ll then be asked to choose a company to service your loans. Options include:

  • Navient
  • Great Lakes Educational Loan Services
  • Nelnet
  • FedLoan Servicing

On the next page, you’ll enter some information about your income and family size to estimate your payments with the new loan and the repayment plans for which you’re eligible. Next, you’ll review the terms and conditions of the Direct Loan Consolidation program and fill in your personal information.

The following is required:

  • Former name(s)
  • Drivers license information
  • Permanent address
  • Email address
  • Telephone number and best time to reach you
  • Employer information
  • At least two references who have lived in the U.S. at least three years

Once all of this has been completed, you can review your application and submit it.

After you submit your application, the consolidation servicer you selected will take the next steps to consolidate your loans.

If you have any questions throughout the process, contact them directly by calling 1-800-557-7392.

If you’re not comfortable with going through the process on your own, you can also apply through DocuPop for a fee. The company offers step-by-step guidance through the entire consolidation process. They’ll help you find the right repayment plan for your needs and help you avoid delays in getting approved.

Unless the loans you’re consolidating are in deferment, forbearance, or grace period, keep making payments until you get confirmation from the servicer that the process is complete.

Before you apply for consolidation, Riskin recommends that you make sure “a thorough analysis of the existing loans has been completed to determine which loans are federal, which loans are private, and which federal loans may lose benefits or provisions that aren’t available through a consolidation loan.”

Pros and cons of federal student loan consolidation


Compare the pros and cons to make a better decision.

  • One easy payment
  • Fixed interest rate
  • Can qualify for multiple income-driven repayment plans
  • Maintain federal student loan benefits
  • Rounded-up interest rate
  • More interest costs overall
  • You may lose some benefits from the original loans
  • Public Service Loan Forgiveness reset

How to apply for an income-driven repayment plan

The Department of Education offers four income-driven repayment plans:

  • PAYE
  • Income-Based Repayment
  • Income-Contingent Repayment

Each plan calculates your payment differently, but they all lower your monthly payment to a fraction of your income.

Make sure you’re eligible for an income-driven repayment plan

Not all federal student loans are eligible for all four income-driven repayment plans. Review a list of eligible loans to see if yours qualify. If not, it will say whether consolidating your loans will grant them eligibility.

Once you know if your loans qualify, check to see if you qualify. For example, to qualify for PAYE, you must be a new borrower as of October 1, 2007, and you must have received a disbursement of a Direct Loan on or after October 1, 2011.

Also, both PAYE and Income-Based Repayment require that you have financial need. Learn more about eligibility here.

How to apply

Once you’ve decided which repayment plan you want and have confirmed that you’re eligible, visit StudentLoans.gov or get a paper form from your student loan servicer. Before you start your application, you’ll need to log in with your FSA account.

Then, you’ll walk through the application process, sharing the following information:

  • Permanent address
  • Email address
  • Phone number and best time to reach you
  • Proof of income, if you choose not to use income from last year’s tax return

If you’re married, your spouse will need to cosign the application because the decision will likely be based on both of your incomes. This does not mean, however, that your spouse is obligated to repay the loan like a typical cosigner.

During the application process, you can either choose which plan you want or request that your servicer decide which plans you qualify for and place you on the one with the lowest payment.

As with consolidation, DocuPop also offers a service to help you find the right income-driven repayment plan and apply for it.

Pros and cons of income-driven repayment plans


Compare the pros and cons to make a better decision.

  • Lower monthly payments
  • Qualify for Public Service Loan Forgiveness
  • Remaining balance will be forgiven once your term is up (20 to 25 years)
  • No fixed payments (will change with income)
  • Not all loans qualify
  • Forgiven debt may be taxable
  • More interest costs overall
  • Longer repayment term

Another way to make student loan repayment easier

Before you consolidate your federal student loans or get on an income-driven repayment plan, consider refinancing them. By refinancing your loans with a private lender, you may be able to get a lower interest rate.

You can even refinance with a longer repayment term and lower payment.

Just keep in mind that you can’t go back once you refinance. You may also lose certain federal benefits and protections by refinancing. Compare the top student loan refinancing lenders to see what kind of features they have.

Then, compare what they offer with the benefits you’d get from consolidating or getting on an income-driven repayment plan. The more you know about each of these options, the better you can manage your student loan debt.