I recently graduated college in the US, and my loans went into COVID-19 forbearance. I'm not required to make payments until January 2021, but I have been witling away at them for a few months since graduating. My loans have only accrued minimal interest. I have a combination of subsidized, unsubsidized, and parent plus loans.

I'm looking into repayment options for when forbearance ends, and based on my situation (salary, 401k, dependents, etc.), studentaid.gov told me that the repayment plan that would let me pay my loans off fastest is Income-Contingent Repayment (ICR).

As part of the plan, I would need to consolidate several of my loans into one. It seems like consolidating wouldn't have any serious consequences, but I'm cautious to do so with the possibility that some student debt would get forgiven under President-Elect Biden's administration. I'm not holding my breath that it would actually happen, but would consolidating my loans disqualify me from receiving this kind of aid? My sister consolidated her loans into a personal loan, which disqualified her from the COVID-19 forbearance, so I'm worried about being subjected to a similar disqualification. Thank you for your help!

  • It would depend on what, if any, program gets put into place, what kind of loans become eligible, whether and how borrower employment/income affects eligibility, etc. You're asking us to compare two options, where one is a highly speculative hypothetical. Either "Don't pay because your entirely loan will be forgiven" or "No loans will be forgiven at all" could be a correct prediction, and reality may end up somewhere in between.
    – yoozer8
    Nov 17, 2020 at 21:32
  • If you remove the speculative part about any future forgiveness/forbearance and just ask how to evaluate whether to consolidate, that would be far more answerable. But might be a duplicate (e.g. of money.stackexchange.com/questions/4367/…)
    – yoozer8
    Nov 17, 2020 at 21:36
  • Your sister lost out because a personal loan is just that: a personal loan, not a student loan. Is Income-Contingent Repayment considered a form of student loan?
    – RonJohn
    Nov 17, 2020 at 21:52
  • Do everything you possibly can to get out of student debt.
    – Fattie
    Nov 18, 2020 at 2:24

1 Answer 1


would consolidating my loans disqualify me from receiving this kind of aid?

No one knows any details about what any hypothetical loan forgiveness plan would or would not cover. Would the Government actually pay the lenders the forgiveness amount? Or would it be through some sort of tax credit. No one knows at this point. It's all still just talk until an actual Executive Order is created. I would suspect, however, that consolidated loans would NOT be covered.

That said, if you can afford to pay more than the minimums on the loans and have a plan to pay them off, consolidation may actually not be the best plan. Consolidation lumps everything together into one payment, while keeping them separate gives you flexibility to, say, pay the lowest balance first to get them knocked out (reducing your minimum payment burden), or pay the highest interest rate first to save on interest costs. Consolidation may also increase the amortization length, making yo pay more interest in the end. Unless the interest savings with the consolidation are significant (maybe 1% or more) and you don't have to pay significant upfront fees (or roll them into your loans), I'd be tempted just to leave them as-is and develop a plan to pay them off quickly within your budget.

If you want to slow-roll them with some hope that forgiveness is around the corner, that's your right, but if it doesn't materialize (or for whatever reason you're not qualified) then you would have paid more interest than you needed to. It may be a risk worth taking.

I would NOT pay just the minimums and go spend the money on other stuff hoping for forgiveness. Keep the money saved up in case no forqiveness happens so you can catch up when needed.

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