 TITLE: Your Options for Getting Out of Student Loan Default CONTENT: How to Consolidate Student Loans\n--------------------------------\nStudent loan consolidation is when the government pays off a previous loan, or multiple loans, and issues you a new direct consolidation loan. It's an option even for federal loans that are not in default: It can simplify repayment and give some borrowers access to repayment programs they couldn't use otherwise.\nIf you've fallen behind on payments, consolidation can help you get your loan out of default faster than rehabilitation. But the default notation will remain on your credit report for seven years, even after your defaulted loan has been consolidated into a new one. Here's how the consolidation process works when a loan is in default:\n1.  Contact your student loan servicer and explain that you'd like to submit an application to consolidate a defaulted student loan.\n2.  If you have the means, you can choose to make three on-time monthly payments on the loan before consolidation. Your loan servicer will determine the payment amount, but according to the U.S. Department of Education, it must be affordable for you. Once the loan is consolidated, you can then choose any repayment plan for the remainder of your payments.\n3.  Alternatively, you can opt to make no payments before consolidating, and then choose an income-driven repayment plan once you've consolidated the defaulted loan. Income-driven plans limit your monthly payment to a percentage of your income. If your defaulted loan is a parent PLUS loan, the only income-driven plan you can choose is income-contingent repayment.\n4.  Once your loan has been consolidated and you're making on-time payments according to your new loan agreement, your loan will be back in good standing. But your credit report will still reflect that it was in default.\nYou can't consolidate a defaulted loan if it's currently subject to wage garnishment, or if you were sued by a loan holder and your debt is being collected as the result of a judgment in court. The garnishment and judgment orders must end before you can consolidate. END