How To Consolidate Student Loans From Different Lenders And Programs

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Piglet Looking Sadly Into The Camera v2

Piglet gets very sad when borrowers don’t understand their options.

Helping people understand student loans is our job at SALT™, and few are better at it than Betsy Mayotte—the director of regulatory compliance for American Student Assistance® (our parent company). We told borrowers to “Just Ask” her questions, so check out her answers below (as well as her cat—because if Piglet can’t make student loans better, what can?).


Consolidating Loans From Different Lenders

Hello, I am in desperate need of guidance. I didn’t know what I was signing up for when I was 17 years old and taking out student loans. I have $54,000 in federal loans and probably another $40–$50,000 in private loans. I need to know how and if I should consolidate these. I have an income of $63,000 before taxes. I cannot afford to have skyrocketing outrageous payments of $1,000/month. I am on my own—help!

You cannot consolidate your federal and private loans together—and even if you could, I would tell you that this would be a terrible idea. (That’s because doing so would mean you would lose all your federal loan benefits and options.)

The only way you can consolidate your federal loans is through the federal Direct Loan program: Private loans have several consolidation options; first, try the lender your private loans are currently with, and then check these other private consolidation products on We can’t recommend one lender over another, but we did list all the options we could find.

Once you’ve consolidated, look into income-based repayment and other lower payment options for your federal loans. A good strategy might be to lower the federal payments as much as you can, so you can throw more money at the private loans—which generally speaking have very few options available and higher interest rates.

There are many student loan forgiveness programs out there as well. You may want to check out these out too, and we’ve listed all we could find in our eBook “60+ Ways To Get Rid Of Your Student Loans (Without Paying Them).” Hope that helps—email us again if you have more questions.

Consolidating Loans From Different Federal Programs

My student loan situation is a mess, which is especially bad since I work in higher ed. I have a FFELP loan in default that I’m trying to fix. Consolidation is really my only option, as I have used rehabilitation previously and my understanding is that you can only use it once. If I consolidate a FFELP loan with my other direct loans, can it be eligible for IBR and the public forgiveness program—and does working for a public community college count toward loan forgiveness?

It’s true that if you have rehabilitated your defaulted student loans since August 14, 2008, you would not be eligible to do so again.

To answer your other questions, yes—if you consolidate the FFELP loan with the Direct loans, it will be eligible for IBR and PSLF. If the college you work for is public or nonprofit, it should qualify for PSLF. However, to be sure, you can always submit the PSLF employment verification application.

Please let me know if you have additional questions.

Have a student loan question you need an answer to? Just Ask.

(Note: The questions and answers above are real; however, they have been edited for grammar and clarity, but not by Piglet.)

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