If you submitted a completed paper loan consolidation application directly to your loan servicer, they can confirm that you submitted an application and its processing status. Note: Processing typically takes about four to six weeks from the date an application is submitted.
Debt consolidation loans typically involve applying for a new loan to pay off existing debts, and the approval and disbursement process can take several weeks. On the other hand, balance transfer credit cards may offer quicker results, as the transfer of balances can occur within a few weeks.
MOHELA processes payments and documents sent over from your prior federal student loan servicer. Everything is generally processed within 30 business days. Payments will be made effective as of the date your prior servicer received the payment.
After you submit your Direct Consolidation Loan application, the Department of Education reviews your personal finance details and calls your references. It'll then let you know if you're approved. The government pays off your new loans.
The entire process typically takes between four and six weeks from the date your application is received. Before completing a consolidation application, carefully consider the following information to determine whether loan consolidation is the best option for you.
Loans serviced by MOHELA? If you faxed or mailed your PSLF form to MOHELA it may take up to 14 days for your mohela.com account to note that the form was received. Please allow at least 90 business days for your form to be processed.
In July 2024, AFT sued MOHELA for a wide range of unlawful practices, including illegally executing a “call deflection” scheme to deny service to borrowers who need help.
What does paid in full by consolidation mean? Paid in full by consolidation in student loan terms means that multiple loans have been combined into one larger loan — typically with improved repayment terms, such as more flexible repayment options, lower monthly payments, or greater loan forgiveness opportunities.
Processing times will vary depending on factors such as whether you previously submitted documentation of employment for review or submitted documentation only at the time you applied for loan forgiveness, the number of your employers, any gaps in your employment or payment history, and any required follow-up.
The top reason banks and other lenders deny a consolidation loan application is the applicant's poor credit score. Your credit score is a number that represents how risky you are to the lender.
If you're facing hefty debt, consolidation could bring some relief, such as a single monthly payment and a lower interest rate. But consolidating your debt can also impact your credit score — for the better and for the worse. It all depends on how you approach the consolidation process.
Get funded and pay off your debts
Once approved, funding time is typically within a week, though some lenders may offer same- or next-day funding. Lenders can deposit the loan funds in your bank account, but some may offer to send the money directly to your creditors on your behalf, saving you that step.
You can be denied a student loan consolidation for different reasons, such as a low income, too much debt, or a low credit score. A low income might signal to a lender that you don't have enough money to cover a new loan. Too much debt signals the same thing and that you might not be able to handle debt.
If you work in certain public service jobs and make 120 payments on your Direct Loan(s), you may be eligible to have your loans forgiven. If you are a teacher in a low-income school or educational service agency, you may be eligible for Teacher Loan Forgiveness.
Consolidation has potential downsides, too: Because consolidation can lengthen your repayment period, you'll likely pay more in interest over the long run.
Your application will be processed in about six weeks.
Processing typically takes about 30 days from the date you submit the request. Please note we're experiencing processing delays based on volume.
MOHELA will report your loan as "Paid in Full" to the consumer reporting agencies at the end of the month that your loan reflects a zero balance.
Online: 2-4 business days from the payment processing date to post. However, the payment will be effective the date your payment was scheduled. Phone: 2-4 business days from the payment processing date to post. However, the payment will be effective the date your payment was scheduled.
In October 2023, the U.S. Department of Education disclosed that MOHELA failed to send monthly student loan bills to 2.5 million borrowers, resulting in 800,000 borrowers missing a monthly payment.
The PSLF Program allows you to receive forgiveness of the remaining balance of your Direct Loans after you have made the equivalent of 120 qualifying monthly payments under an accepted repayment plan while working full-time for an eligible employer.
When asked by the senators, MOHELA reported it had received 36,309 complaints in a year, of which almost 4,000 were still marked “unresolved” in its internal system. The latest PSLF report, dated June 2023, by the Office of Federal Student Aid shows the servicer has a backlog of almost 890,000 applications.
A Standard Forbearance allows a borrower to temporarily reduce the monthly loan payment to $5 for a specific loan for a limited period of time.
Call MOHELA
Call 888.866. 4352 (Toll Free) or 636.532. 0600 (International) , to speak with one of our Student Loan Counselors.