Direct consolidation loans are eligible for federal student loan forgiveness, whether through an income-driven repayment (IDR) plan, Public Service Loan Forgiveness (PSLF), or Teacher Loan Forgiveness for qualifying teachers.
What loans qualify for forgiveness? Only loans you received under the Direct Loan Program are eligible for PSLF. Loans you received under the Federal Family Education Loan (FFEL) Program, the Federal Perkins Loan (Perkins Loan) Program, or any other student loan program are not eligible for PSLF.
All Direct Loans are PSLF-eligible. If you have FFELP loans those must be consolidated to make them eligible. If you have Direct Loans from different time periods with eligible employment in between then you may want to consolidate before 12/31/23 to take advantage of the IDR adjustment.
If you consolidate undergraduate and graduate loans together, then you will have to make 25 years worth of payments (300 payments) in order to qualify for forgiveness, unless you are part of the PSLF Program or PAYE (not to be confused with REPAYE or SAVE).
Consolidation has potential downsides, too: Because consolidation can lengthen your repayment period, you'll likely pay more in interest over the long run.
You must be a direct employee of a qualifying employer for your employment to qualify. This means that employees of contracted organizations, that are not themselves a qualifying employer, won't qualify for PSLF including government contractors and for-profit organizations.
If you work in certain public service jobs and have made 120 payments on your Direct Loans, you may be eligible to have your loans forgiven. If some or all of your payments were not made on a qualifying repayment plan for PSLF, you may be able to receive loan forgiveness under a temporary opportunity.
Consolidation allows you to combine all or some of your private and federal student loans into one large private consolidation loan through a private lender or bank.
Which loans are eligible for loan forgiveness? Only Federal Direct Loan Program loans that are not in default are eligible for PSLF (ie - Direct Subsidized Loans, Direct Unsubsidized Loans, Direct PLUS Loans, Direct Consolidation Loans).
If you took out private student loans to fund your higher education, these aren't eligible for forgiveness, as PSLF only forgives some federal student loans. At the federal level, some government-backed student loans also don't qualify for forgiveness, including: Federal Family Education Loan (FFEL)
You may be eligible for income-driven repayment (IDR) loan forgiveness if you've have been in repayment for 20 or 25 years. An IDR plan bases your monthly payment on your income and family size.
A qualifying loan for PSLF is any non-defaulted loan received under the William D. Ford Federal Direct Loan (Direct Loan) Program.
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.
Here's how: If you consolidated your FFELP loans into a Direct Consolidation Loan by June 30, 2024, you will automatically receive credit toward 20- to 25-year forgiveness for past deferment, forbearance, and repayment periods.
You can still apply for Student Loan Forgiveness in 2024. Despite the Supreme Court striking down Biden's initial plan to cancel up to $20,000 in student loans, the president has introduced other programs that have provided $167.3 billion in student loan forgiveness to over 4 million borrowers.
Consolidation can get you closer to loan forgiveness
Those payments are typically lower than they would be under a standard repayment plan — and, in some cases, they can be zero. Depending on the plan, borrowers can get any remaining debt forgiven after 10, 20 or 25 years.
Once your loan has been funded, you will receive a Federal Loan Consolidation Disclosure Statement and Repayment Schedule from the servicer of your new Consolidation loan.
Private loans are not eligible to be consolidated in the Direct Loan Consolidation Program. Spousal consolidations (federal student loans you and your spouse consolidated into one consolidation loan) are not eligible to be consolidated in the Direct Loan Consolidation Program.
Your student loan servicer(s) will notify you directly after your forgiveness is processed. Make sure to keep your contact information up to date on StudentAid.gov and with your servicer(s). If you haven't yet qualified for forgiveness, you'll be able to see your exact payment counts in the future.
No longer a small Missouri-based company, MOHELA is now one of the largest federal student loan servicers, servicing the accounts of federal student loan borrowers in every state. Since 2021, MOHELA has more than tripled its portfolio of Department of Education (ED)-held federal loans.
Any borrower with ED-held loans that have accumulated time in repayment of at least 20 or 25 years will see automatic forgiveness, even if the loans are not currently on an IDR plan. Borrowers with FFELP loans held by commercial lenders or Perkins loans not held by ED can benefit if they consolidate into Direct Loans.
What student loans are not eligible for forgiveness? Private student loans, by definition, are private and are not eligible to be forgiven.
The PSLF program supports public servants—including teachers, nurses, social workers, first responders, service members, and other public servants—by forgiving the remaining student loan balance for those who make the required 120 qualifying monthly payments.