Can I ConsolidateAll My Student Loans Into a Federal Consolidation Loan? – Jules

“Dear Steve,

I am at the very end of the grace period since I graduated, and will owe a total of $47,000 in student loans (all are government ED loans both Direct and Stafford unsubsidized and subsidized).

The Direct loans are being serviced by Great Lakes, and until I call them I don’t know what the payment(s). The Stafford loans are being serviced by American Education Services who have split these loans into 3 payments totaling $298 per month on the standard payment plan. Also, the first loan began in mid October of 1998 – June 2003 then I deferred them till a took a $1,500 loan out last year.

My current situation is bad since I am currently being supported 100% since I could not find employment for the last two years. The good news is I just got hired by a company in my field, but won’t start work till the first week in December, and my first check isn’t till the 15th of December (when the first loan payment will be sent to me). I will be moving from California to Nevada for this job too.

I would like your advice since I went back to college am 40yrs old now that I finished college. Currently, I was going to try to make the standard payment, but it would be to much for me with my new bills for the new place I will be renting, and paying for everything to support myself in NV.

I am thinking of consolidating all my loans, but should I use the Federal Student Aid (loanconsolidation.ed.gov) to consolidate both the Direct and Stafford loans ( do they consolidate both direct and stafford loans), or is there a different website for the government consolidation for both direct and stafford student loans?

Also, If I consolidate my student loans, if I need to do so can get a forbearance If I can’t pay for some reason till the following month? If I choose the standard payment plan can I change this plan later and how many times can I change my payment plan? Can I get the extended payment plan when I consolidate? I ask this because I have not found a clear answer online.

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Any other advice you can give me is appreciated.

Thank you,


Dear Jules,

Thank you for asking me your question.

The following loans can be consolidated in the Federal Direct Consolidation program.

Subsidized Loans:

  • Subsidized Federal Stafford Loans
  • Direct Subsidized Loans
  • Subsidized Federal Consolidation Loans
  • Direct Subsidized Consolidation Loans
  • Federal Insured Student Loans (FISL)
  • Guaranteed Student Loans (GSL)

Unsubsidized Loans:

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  • Unsubsidized and Nonsubsidized Federal Stafford Loans
  • Direct Unsubsidized Loans, including Direct Unsubsidized Loans (TEACH) (converted from TEACH Grants)
  • Unsubsidized Federal Consolidation Loans
  • Direct Unsubsidized Consolidation Loans
  • Federal PLUS Loans (for parents or for graduate and professional students)
  • Direct PLUS Loans (for parents or for graduate and professional students)
  • Direct PLUS Consolidation Loans
  • Federal Perkins Loans
  • National Direct Student Loans (NDSL)
  • National Defense Student Loans (NDSL)
  • Federal Supplemental Loans for Students (SLS)
  • Parent Loans for Undergraduate Students (PLUS)
  • Auxiliary Loans to Assist Students (ALAS)
  • Health Professions Student Loans (HPSL)
  • Health Education Assistance Loans (HEAL)
  • Nursing Student Loans (NSL)
  • Loans for Disadvantaged Students (LDS)

Without a doubt the fastest and cleanest way to repay student loans is the ten year full repayment plan. Outside of that there are some other alternatives that in the long run may cost you more but give you a lower payment.

When you complete your online application for the consolidated loan you can choose a payment that is income contingent and based on what you can really afford.

Till your income increases, this is far more beneficial than missing payments. Just keep in mind that while your student loans may be forgiven after 20-25 years in an income contingent program, the balance will continue to increase and the forgiven debt may be taxable.

Outside of that approach the fastest way to eliminate all of your student loans would be through a public service loan forgiveness program. More details on that are here.

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As far as the timing of all of this it will really depend on how quickly you get moving with this and what the Federal Direct Consolidation Loan program establishes as your first payment. But based on your past income and circumstances, your income contingent payment may be as low as $0 per month at the moment.

Please post your responses and follow-up messages to me on this in the comments section below.

Damon Day - Pro Debt Coach

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Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
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