Unless you’re one of the few borrowers with a Joint Consolidation Loan, you can’t reverse a consolidation that’s already been completed. But if you catch the process in progress, stopping a consolidation is an option.
As you know, the process begins on the Federal Student Aid website, StudentAid.gov, where you can select a loan servicer and choose from eligible loan types such as Federal Family Education Loans (FFEL), Parent PLUS Loans, Grad PLUS Loans, Subsidized and Unsubsidized Stafford Loans, and Federal Perkins Loans.
Related: Are FFEL Loans Eligible for Student Loan Forgiveness?
The new Federal Direct Consolidation Loan will have a fixed interest rate that’s a weighted average of the original loans’ rates, without any reductions, for the life of the loan. This may result in a slight increase in the interest rate.
Once you submit your application, the servicer will send out a Loan Verification Certificate to get payoff information from the existing loan holders.
Two weeks before the new loan is disbursed, you’ll get a Loan Summary Statement with details such as the loans included in the consolidation, the principal balance, interest rate, and estimated monthly payment under different repayment options like the Standard Repayment Plan and income-driven repayment plans.
You’ll have 10 days to review this statement and make changes if needed — which includes canceling the consolidation if desired.
To do this, contact your servicer and ask them to stop it.