How Do I Consolidate My Loans?

Here is a step by step process for completing the consolidation application on studentaid.gov. 

1. If you have federal loans, whether Direct or FFEL loans, you should have an account already with studentaid.gov. If you do not have an account, you can create an account at https://studentaid.gov/fsa-id/create-account/launch. 
2. Once you login, you will be directed to your Student Aid Dashboard. You will see an option about halfway down the page to Apply for a Direct Consolidation Loan. You will click on the blue Apply Now button.
3. You will then see a breakdown of the steps you will need to complete for the consolidation application. At the bottom, you will see the blue Continue button, you can click on that button.
   
4. On the next screen you will begin the Consolidation application. The first step will be to verify your information. If everything is correct, you will just need to click on the blue Continue button. If any of your information is incorrect, you can update it on this page and then click on the Continue button.
   
5. Next you will be asked about your employment information. If you are not currently employed, you will keep the toggle button gray and click on the blue Continue button. If you are currently employed, you will click on the button where it will state I am Employed and then you will enter your current employment information and then click on Continue.
   
   (Note, information entered on this screen will not affect your consolidation application.)
   
6. Next you will select the loans that you want to include in the consolidation. You will want to select any FFEL and/or Parent PLUS loans. If you have a mix of Direct and FFEL loans, you DO NOT want to include both in a consolidation loan. You can read more about this here: https://bysavi.zendesk.com/hc/en-us/articles/31467536459027-Consolidation-and-It-s-Effects-on-PSLF-and-IDR-Forgiveness-Progress   
   
   You will be provided with the total amount for the loans included as well as your new interest rate. Note, this interest rate is a fixed interest rate. Once you include all of your loans, you will click on the blue Continue button.
   
7. Next the application will ask if you want to delay processing. Select Do Not Delay Processing and click Continue.
8. You will then be prompted to select your loan servicer for your new consolidation loan. Currently all borrowers will have the option between AidVantage, EdFinancial, and MOHELA. You can choose from those three options. Borrowers pursuing PSLF no longer have to remain with MOHELA. Once you select your servicer, click on the Continue button.
   
9. Next you will choose your repayment plan. For most borrowers, an Income Driven Repayment (IDR) plan will give you a lower monthly payment. If you are pursuing PSLF, you will need to select an IDR plan. Fixed plans are not eligible for PSLF or if you are pursuing forgiveness after 20/25 years of payments. You will select the option on the left to select an IDR plan and then click on Continue.
   
10. You will then be prompted to authorize the Department of Education to access your IRS information. If you authorize this, they will use your most recent tax return information to calculate your monthly payment. If you decline the authorization, you will need to submit income documentation on your own in a few steps..
    
11. Next you will note any changes in your marital status and family size. Note any changes and click on the Continue button.
    
12. Next the application will import your information if you authorized the Department of Education to access your IRS data. If you declined this, at this step you will upload either your recent tax return or recent paystubs. Click on Continue.
    
13. This next screen will ask if you have seen a decrease in your income. If your income has been the same or increased since your last tax return, answer no for this question. If your income has decreased, answer yes and then select the option to have your loan servicer calculate your monthly payments. The application will prompt you to upload your recent pay stubs. Click on Continue.
    
14. On the next screen you will see your available repayment plan options. We recommend you select the lowest monthly payment option. If you are including Parent PLUS loans in the consolidation, you will only see the option for the ICR (Income Contingent Repayment) plan. Select the best plan for you and click Continue.
    
15. Next you will need to list two references. This will need to be two people who do not live at your residence. You will need their address, phone number, email (optional) and employer information (optional). These references will not be required to ever pay on the loan. Once you enter both references, click on Continue.
    
16. Next will be the terms and conditions. Once you review and click the checkmark agreeing to the terms and conditions, click on Continue.
    
17. You will then have the option to review your application before submitting. We have noticed that the application is defaulting to Not Currently Employed. This change will not change your application, you can go ahead and continue. The Department of Education is aware of this bug. Click Continue.
    
18. Finally, you will provide your electronic signature. Once you click on Submit, this will submit your consolidation application to Student Aid.
    

As your consolidation is processing, here's what you can expect: 

1. You will be put into an Administrative Forbearance and will not need to pay on your loan while your consolidation request is being processed.
2. First you will receive a letter from The Department of Education that they received your application. 
3. Next Aidvantage will let you know that they are processing the consolidation application. Aidvantage is the loan servicer who processes the applications for FSA, this is normal. 
4. Finally, once your loan servicer finishes processing your application, they will then transfer your new loan and the consolidation will be complete. Your loan servicer will send you a welcome letter with instructions to set up your account.