A borrower who restores eligibility for aid once must continue making timely payments to qualify for further financial aid. If any payments are missed or not made within 15 days of the due date, the loan must be paid in full before receiving additional aid. Loan Consolidation Borrowers with defaulted loans can return to favorable repayment status through loan consolidation. To be eligible for consolidation, they must have made satisfactory repayment arrangements consisting of at least three consecutive, voluntary, monthly payments made within 15 days of the due date. Some lenders may require more than three payments.
Consolidation combines the borrower's eligible federal loans into one.
Depending on the size of the debt, borrowers may have 10 to 30 years to repay their loans. Borrowers who consolidate regain eligibility for deferment and Title IV aid. After consolidation, borrowers' credit records show the loans as paid in full. Borrowers shoul d check to see if their lender offers loan consolidation. Bankruptcy Many people choose bankruptcy as their best option to resolve debt and default problems.