Student loan consolidation vs. student loan forgiveness

3 min read

If you’re among the 44 million Americans who collectively hold over $1.5 trillion in student debt, finding a solution can be more than just wishful thinking.

Figuring out how to consolidate student loans or have your student debt forgiven might provide some relief. While neither of these options will eliminate your debt instantly, consolidation or forgiveness could certainly ease the financial pressure.

But which option is right for you? Should you try to consolidate student loans or focus on forgiveness? Factors including the type of loans you have, your career path, your level of debt and your financial priorities will determine your options — and influence your decision.

The basics of student loan consolidation

If you have multiple loans, you’re no doubt familiar with multiple monthly payments and varying interest rates. That’s where student loan consolidation can help.

With debt consolidation, you’re combining multiple student loans into one loan from a single lender. You won’t have to worry about juggling multiple loans and you might even be able to improve your repayment terms.

While consolidating your loans can simplify your loan payments and make them more manageable, it does carry the risk of paying a higher interest rate. However, the opposite holds true if interest rates have fallen since you took out the loans. In that case, you could lock in a lower rate with a consolidation loan.

Be sure to check student loan consolidation rates as you consider consolidating your loans and continue to keep an eye on interest rates before making a decision.

Getting a debt consolidation loan to manage your student debt can be a smart move. Still, you should take stock of your financial position before looking into student loan consolidation.

What loans qualify for consolidation?

Loans eligible for consolidation include:

  • Subsidized Federal Stafford Loans
  • Unsubsidized Federal Stafford Loans
  • PLUS loans from the Federal Family Education Loan (FFEL) Program
  • Supplemental Loans for Students
  • Federal Perkins Loans
  • Nursing Student Loans
  • Nurse Faculty Loans
  • Health Education Assistance Loans
  • Health Professions Student Loans
  • Loans for Disadvantaged Students
  • Direct Subsidized Loans
  • Direct Unsubsidized Loans
  • Direct PLUS Loans
Student loan consolidation pros and cons

Before you even start planning how to consolidate student loans, you should ask the essential question: “Should I consolidate my student loans?” Consider some potential benefits and drawbacks:


  • Simplicity — one monthly payment versus several
  • The potential to pay less per month
  • Potential eligibility for lower interest rates


  • Potentially higher interest rates
  • Longer repayment period
  • You could lose borrower’s benefits (especially if you have a loan enrolled in student loan forgiveness)

What is student loan forgiveness?

Student loan forgiveness will not instantly wipe the slate clean. Rather, student loan forgiveness makes the monthly payments more affordable during the loan term of (usually) 20-25 years.

The light at the end of the tunnel, usually, is that the government will pick up whatever balance remains upon loan maturity.

Qualifying for a student loan forgiveness program can be a little tricky, because each program has its own set of requirements.

Student loan forgiveness programs

Below, you’ll find a comprehensive list of available student loan forgiveness programs:

Public Service Loan Forgiveness (PSLF)

Just as the name suggests, the Public Service Loan Forgiveness program is geared toward people working in public service jobs. This can include public safety, education, or even government work. After 120 monthly payments, you could qualify for 100% percent loan forgiveness of the remaining balance.

Federal Perkins Loan cancellation

If you took out a Federal Perkins Loan for school, then the Perkins Loan cancellation and discharge program could forgive a certain portion of debt.

Loan repayment assistance for lawyers

For those considering a future career in law, there are a plethora of national and state programs to help offset the high-cost education. These include:

  • State and university-sponsored LRAPs (Loan Repayment Assistance Programs)
  • John R. Justice Student Loan Repayment Program
  • Herbert S. Garten Loan Repayment Assistance Program
  • Department of Justice Attorney Student Loan Repayment Program

Military student loan forgiveness and assistance

Servicemembers and veterans of the armed forces (especially the Army and Navy) can also receive loan forgiveness. Take the Navy program, for example, which can offer financial aid of up to $65,000. There’s also the College Loan Repayment Program for the Army, which pays a third of your loans annually (for up to 3 years).

Loan repayment assistance for health-care professionals

Studying to become a physician? What about a pharmacist? As crucial as these professions are, the education does not come cheap. Luckily, there are a variety of state and national programs that offer forgiveness and financial aid, such as:

  • Students to Service Program
  • Loan forgiveness for doctors in the Armed Forces
  • State LRAP programs for doctors and other health care professionals
  • National Health Service Corps (NHSC) loan repayment assistance
  • National Institutes of Health (NIH) Loan Repayment Programs
  • Indian Health Services Loan Repayment Program

Loan forgiveness for teachers

Teacher Loan Forgiveness is a national loan forgiveness program that helps teachers pay back their student loans. As long as you’re a teacher employed a qualifying school for five years, you can receive loan forgiveness. To see if your school qualifies, consult the Teacher Cancellation Low Income Directory.

Student loan forgiveness pros and cons


  • Relieves a significant portion of debt (but not necessarily all!)
  • You don’t have to work strictly in public service to qualify
  • There are a variety of payment plans so you aren’t pigeonholed


  • Long-term job commitment to a qualifying employer is a must
  • Your job prospects will be limited to qualify for the federal student loan forgiveness program
  • There are no standardized qualifications for various programs and they all vary in strictness

TIPS ON REPAYMENT: Learn more about forgiveness, refinancing and other methods of repaying student loans.

Changing Rates Icon showing rates changing over time.

Refinance your student loan for a better rate and a faster payoff date.