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People often wonder if it is possible to consolidate a defaulted loan. The answer is yes, federal education loans in default may be consolidated, but the process can be complex, with many requirements and qualifications. Borrowers must agree to repay the loans by making satisfactory repayment arrangements with the current loan holders.
Borrowers cannot consolidate defaulted loans if a judgment has been issued against a defaulted loan unless the judgment order has been dismissed. Borrowers also cannot consolidate their student loans if they are trying to consolidate defaulted FFEL Consolidation Loans or if they are trying to consolidate defaulted Perkins or health professions loans. (unless they have made satisfactory repayment arrangements with the current loan holder). Defaulted Perkins Loans and health professions loans , collection costs may equal the amount owed at the time the defaulted loan is paid off through consolidation.
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