The U.S. Department of Education will allow you to combine one or more federal student loans into one new loan if you qualify for the William D. Ford Act, otherwise known as the (Obama Loan Forgiveness Program). As a result of the consolidation, you will have to make only one payment each month on your Federal Student Loans, and the amount of time you have to repay your loan will be extended.
Situation 1: You Defaulted on a Federal Student Loan
We all have some degree of hardship whether you dropped out of School or graduated, there's a good chance you've had some trouble making your federal student loan payments. Most federal loans are considered to be in "default" after 270 days, without a payment.
Now that you're thinking about heading back to school to get your degree but your current default status will prevent you from receiving title IV Funding, grant, or work-study stipend. In order to reclaim Title IV eligibility, you may have four options.