You are still responsible for payments until your loan consolidates

This is a problem I wasn’t aware of as much since we never did consolidations.  But since we took over (along with the other Title IV servicers)  in January I’ve noticed a lot of trends in terms of consolidation.

One is that people seem to assume that once you apply for consolidation your loan just stops.  They stop paying and eventually it will go delinquent.

Not only will it go delinquent but consolidations take approximately 45 days (30 business days) so you can risk negative credit reporting and a bunch of phone calls, letters, and emails.

Just think of it like a regular bank loan.  If it took two months for that consolidation loan to be approved all your other bills would still expect to get paid.  Your student loans are no different.  You are still responsible to make payments until your consolidation is completed.

So what if you can’t afford payments during this time?  I would suggest two things.

The first one is the choice my wife made and went with a lower payment plan than can be afforded during this time.  It may not be a long term choice but if you can afford that payment for a payment or two (we used some savings to pay the approximately $500.00) until the consolidation happened.

The second one is just use a forbearance.  This is a perfect time to use a General Forbearance and the reason why you should save it back for special occasions.

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