Currently Relief does not offer this service or tool. In this article you can find general information. Please consult with a financial advisor on the best options for you.
Get Out of Default with Loan Consolidation
If your federal student loans are in default, one option to get back on track and help you regain access to repayment plans and federal aid is to combine them into a new Direct Consolidation Loan.
Here’s how it works 👇
💡 What Is a Direct Consolidation Loan?
A Direct Consolidation Loan lets you combine multiple federal loans into one new loan. This pays off the defaulted loan and replaces it with a new loan that’s current—and no longer in collections.
This is one of the fastest ways to get out of default and start fresh with new payment terms.
🛠️ How to Qualify for Consolidation
To consolidate a defaulted loan, you must either:
Make 3 voluntary, on-time, full monthly payments on the defaulted loan before consolidating.
OR
Agree to repay the new loan under an income-driven repayment (IDR) plan,
👉 Either option works—choose what’s best for your situation.
⚠️ A Few Things to Know Before You Consolidate
The default will stay on your credit report (rehabilitation is the only option that removes it)
Accrued interest gets added to your balance—so the total loan amount may increase
You must lift wage garnishment or court orders before consolidating
👇 How to Start Consolidation
Log in to StudentAid.gov
Go to the Loan Consolidation section
Select the loans you want to consolidate
Choose an income-driven repayment plan
Submit the application and required income info
Once approved, you’ll get:
One loan servicer
A single monthly payment
Access to deferment, forbearance, and forgiveness again
🎓 What Happens After You Consolidate?
You’ll no longer be in default
Collections activity (like wage garnishment or tax refund seizure) will stop
You’re eligible again for federal student aid
🧠 Need Help?
If you're not sure which option is right for you—rehab or consolidation—Relief is here to guide you.