How Long Does Student Loan Consolidation Take? A Complete Guide

Student loan consolidation allows borrowers to combine multiple federal student loans into one direct consolidation loan. This can help simplify repayment by streamlining multiple monthly bills into a single payment. Consolidation also enables access to alternate repayment plans that could reduce your monthly dues.

With federal student loan debt topping $1.6 trillion in the U.S., it’s no wonder consolidation has become an increasingly popular option. But before submitting an application it’s important to understand exactly how the process works and how long it takes from start to finish.

An Overview of Student Loan Consolidation

The U.S. Department of Education offers direct consolidation loans that let you combine multiple federal education loans into one. Eligible federal loans include:

• Direct Subsidized Loans
• Direct Unsubsidized Loans
• Subsidized Federal Stafford Loans
• Unsubsidized Federal Stafford Loans
• Direct PLUS Loans
• FFEL PLUS Loans
• Supplemental Loans for Students
• Federal Perkins Loans

Consolidating these loans together has several key benefits

• Simplify repayment. Make one monthly payment instead of many.
• Extend repayment term. Stretch out payments over 10 to 30 years to reduce your monthly bill.
• Access alternate repayment plans. Income-driven and graduated repayment open up.
• Switch from variable to fixed interest rates. Combine variable-rate loans into a fixed-rate direct consolidation loan.
• Rehabilitate a defaulted loan. Consolidation provides an alternative to rehabilitation.

While consolidation can provide relief, it also has some downsides to consider:

• Pay more interest over time. A longer repayment term means you pay more total interest.
• Lose borrower benefits. Any perks on your current loans (e.g. interest rate discounts) will be lost.
• Pre-consolidation payments don’t count. Any payments made toward forgiveness programs before consolidating will be reset to zero.

Carefully weigh the pros and cons before making your decision. Consolidation offers payment flexibility but may cost more overall.

What’s the Process for Consolidating Your Loans?

1. Apply online – Visit StudentAid.gov and log into your account. Select “Manage Loans” then choose “Consolidate.”

2. Choose loans – Select which federal loans you want to consolidate. This will calculate your new interest rate.

3. Pick repayment plan – Choose a repayment plan that meets your budget. Options include standard, graduated, extended or income-driven plans.

4. Submit application – Review terms, electronically sign the promissory note, and submit your consolidation application.

5. Await approval – It takes 30-90 days to review and approve applications. You’ll get contacted by your new servicer once approved.

6. Start repayment – After consolidation, you have 60 days before the first payment is due. The servicer will notify you of the exact date.

During the application process, carefully review repayment plan options. Pick one that reduces your monthly payment to a comfortable amount.

Key Factors That Determine How Long It Takes

Consolidating your federal student loans is a relatively straightforward process. However, several factors impact the overall timeline from application to completion:

• Application errors – Simple mistakes on your application can delay processing by weeks or months. Carefully review before submitting to avoid errors.

• Servicer workload – Some servicers have higher application volumes, which can extend processing times. Selecting a servicer with a lighter load can speed up approval.

• Grace period status – Loans in their grace period cannot be consolidated until the grace period ends. This can add several months to the timeline.

• Repayment status – Loans must be in repayment or the grace period. Any in school or deferment status must enter repayment first.

• Defaulted loans – Extra steps are required prior to consolidating defaulted loans. Making 3 consecutive payments or agreeing to an income-driven plan can allow consolidation of a defaulted loan.

• Wage garnishment – If your wages are being garnished for a federal student loan, the garnishment order must be lifted before consolidation. This can take 30-60 days.

How Long Does the Overall Process Take?

The complete student loan consolidation process takes between 1-3 months for most borrowers. Here is a look at the typical timeline:

• Application – 30 minutes to complete

• Initial review – 1-2 weeks for processing and initial eligibility review

• Approval process – 2-8 weeks for final review and approval decision

• Notification – 1-2 weeks to get contacted by your servicer after approval

• First payment due – 60 days after consolidation before your first payment

So in total, the entire process typically takes between 4 and 6 weeks from the date your application is received. This assumes no delays related to the factors mentioned earlier.

Here is an estimated timeline assuming you submit your consolidation application at the start of week 1:

• Week 1 – Submit application
• Week 2-3 – Initial review
• Week 4-7 – Final review and decision
• Week 8-9 – Servicer contacts you post-approval
• Week 14 – First payment is due on new consolidation loan

As shown above, it takes about 3-4 weeks to get a decision on your application, and another 2-3 weeks to complete the consolidation process after approval.

Some borrowers may experience shorter or longer timeframes depending on their specific student loans and application details. But most can expect their consolidation loan completed within 6 weeks, once the process is started.

Tips for Speeding Up the Consolidation Process

Here are some tips that could help reduce delays and speed up processing:

• Review your application carefully before submitting to avoid errors.
• Choose an eligible loan servicer that has a lighter workload and faster processing times.
• Consolidate loans after any applicable grace period ends.
• Make sure all loans are in repayment status first if needed.
• Rehabilitate or make payments on any defaulted loans to allow consolidation.
• Get any wage garnishment order lifted if applicable.
• Follow up with your servicer regularly to check status and address any issues.
• Make sure your FSA account contact info is current so your servicer can reach you.

The overall timeline can vary depending on your specific circumstances. But following the tips above can help streamline the process and consolidate your loans more quickly.

Continue Making Payments Until Your Consolidation Is Complete

One important thing to remember is that you must continue making payments on your existing federal student loans until the consolidation process is complete. Your loans won’t get paid off right away.

Your current loans will only be paid off once the final consolidation loan is approved and disbursed. This discharge of your old loans can take 1-2 months after you submit your application.

So you need to keep paying your current monthly bills until your servicer confirms in writing that your consolidation was completed and your old loans are paid off. At that point, you can stop paying on your old loans and just begin repaying your new direct consolidation loan.

Missing payments on your current federal student loans during the consolidation process can negatively impact your credit score and lead to late fees. Avoid this issue by continuing regular payments until everything is consolidated.

Alternatives to Consolidation

While consolidation can provide payment relief through extended terms and lower monthly dues, it also increases your total interest paid over the life of your loans. Here are a few alternatives to consider:

• Income-driven repayment plans – Lower your monthly bill to 10-20% of discretionary income.

• Deferment or forbearance – Temporarily postpone payments for up to 36 months.

• Refinancing – Combine federal and private student loans at a lower rate through a private lender.

• Student loan forgiveness – Have a portion of your debt forgiven through volunteer work or public service.

Unless you need to combine multiple loans or access alternate repayment plans, these options allow short-term relief without the long-term downsides of consolidation.

For some borrowers, consolidation is the right choice to manage repayment. But make sure you understand the pros, cons, and timeline involved before submitting an application. Follow the tips above for the smoothest experience consolidating your federal student loans.