Nearly everyone who has had to pay on their loans throughout the pandemic should consolidate to take advantage of the student loan pause. Not only does it put your payments on hold and stop interest from being added to your loan balance, but it also may push you closer to loan forgiveness.
One of the big changes the Biden administration made to the federal student loan system was to fix the broken PSLF and IDR plan student loan forgiveness programs. Both had been broken for years due to mismanagement by student loan servicers and poor oversight from the U.S. Department of Education.
New leadership is working to right those wrongs by reviewing borrowers’ accounts and giving them credit toward both programs for payments they’ve made under any student loan repayment plan as well as time spent in long forbearances and some deferments.
Related: Student Loan Forgiveness for Married Couples
If you consolidate your federal loans, you can also participate in these debt forgiveness initiatives.
Worried about losing the progress you’ve made toward forgiveness? Consolidating won’t undo your progress toward PSLF or forgiveness through the IDR plans. If you consolidate before May 1, 2023, the department will count your payments made before you consolidated as a qualifying payment for both forgiveness programs.*
Related: Does the Student Loan Pause Count Toward Forgiveness?
* To get credit for PSLF, you must be currently employed full-time with a government or nonprofit employer.