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However, qualifying payments you made before consolidating will no longer count after you consolidate.For example, if you make 20 qualifying PSLF payments and then consolidate, you’ll have to start again and make 120 qualifying PSLF payments before qualifying for forgiveness.If your loans are through the Federal Family Education Loan program, or FFEL, consolidating them with a direct consolidation loan will make you eligible for those programs.Parent borrowers with PLUS loans — even those with direct PLUS loans — need to consolidate before they can be eligible for income-contingent repayment, which is the only income-driven plan parent PLUS loan borrowers are eligible for.There are major benefits and drawbacks of federal consolidation; it’s important to understand both because consolidation can’t be undone.
If you choose an income-driven plan, you’ll be asked to provide income information on the application by granting access to your IRS tax information. The remainder of the application involves filling in basic personal information and providing names of two references who have known you for at least three years.
So, for instance: If the average comes to 6.15%, your new interest rate will be 6.25%.
Additionally, you’ll get a new loan term ranging from 10 to 30 years.
Alternatively, there are six other repayment plans to choose from, including four income-driven plans.
To find the best plan for you, check out Federal Student Aid’s repayment estimator before you begin the consolidation application.