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My Student Loan Consolidation Adventure

I consolidated my loans, but somehow my debt doubled. After a couple of scary days, I learned a lot about the federal consolidation process.

Written By: Michael P. Lux, Esq.

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Affiliate Disclosure and Integrity Pledge

Temporary Forgiveness Clock Rule: The Department of Education is conducting a one-time update of IDR payment counts. Borrowers who consolidate their federal loans before June 30, 2024, can maximize progress toward PSLF and IDR forgiveness.

Editor’s Note: I consolidated my massive student loan debt in early 2013. My experience with student loan consolidation was part of why the Student Loan Sherpa came into existence. Nearly a decade later, I’m still hearing from borrowers with the same problem.

Over the past few months, I have been working on my own federal student loan consolidation.

With well over 100k in student loan debt, I’ve been very careful to ensure that this new consolidated loan would still be eligible for income-based repayment and Public Service Loan Forgiveness.

At this point, I could probably dedicate an entire blog entry just to the hold music I encountered.

Early Hopes Dashed

After doing everything I possibly could to ensure that my consolidation went flawlessly, I was delighted with the initial results.

Less than two weeks after completing my application, I received a letter from MyFedLoan indicating they would consolidate my student loans. This would take place in 15 days unless I called to stop the process.

Sherpa Note: The 15-day waiting period is critical because it is the last chance that borrowers have to opt out. Once the consolidation is completed, there is no way to undo the loan consolidation.

After waiting about two weeks, I anxiously logged on to MyFedLoan to see my loan status. My new consolidated loans were there as promised. One was subsidized, and one was unsubsidized (they’re kept separate because the unsubsidized loans still carry a couple of perks this far into repayment).

However, much to my dismay, all my old loans were still there, as well.

My debt seemingly doubled.

Double Student Loan Debt Panic

I immediately called MyFedLoan to investigate the issue. I was fairly confident it was just a matter of updating their records.

However, because the numbers were so large and so scary, I wasn’t going to wait around.

My conversation with them only made me more nervous.

When I called, I calmly explained that I had just consolidated my student loans. Their website indicated I owed both the new consolidated loans AND the old loans. The lady on the phone was surprised to hear this information.

My Conversation with MyFedLoan

Our exchange went something like this:

Me: Your website shows I owe double the debt.
MyFedLoan: Yeah, that happens.
Me: Can you please fix it? I don’t want you guys reporting to the credit agencies that I owe double.
MyFedLoan: Well, we don’t actually know that they are separate. You will have to call Direct Loan and ask them to fix it.
Me: What happened that would explain my debt showing up double?
MyFedLoan: Well, sometimes they tell us you have the new loan, but sometimes they forget to pay off the old ones.
Me: They what? How often does this happen?
MyFedLoan: Oh, probably 1 or 2 in 50.

I have no idea how accurate her statistic was, but I was quite concerned.

After asking a series of further questions and not getting any help whatsoever, I realized that this call would no longer be productive. I thanked her for her help and proceeded to call Direct Loan.

The Call with Direct Loan (The Department of Education)

After being on hold with Direct Loan for about a decade (possibly an exaggeration), I was finally speaking with someone about my newly doubled debt. I explained my situation to the Direct Loan person on the phone. She stated, “They should have gotten a check from us.” I agreed and told her, “They should have gotten a check but claim not to have received one.”

She then told me that there was nothing she could do and take up the issue with MyFedLoan.

I explained that MyFedLoan told me this was a Direct Loan issue and that they couldn’t fix it. So, I asked if they could communicate with each other and was told that this would never happen.

At this point, I asked if I could speak with a supervisor or someone with the authority to help. When I was transferred and explained my situation for the third time, the supervisor said that he would “file a report” and that someone would investigate the issue. This sounded inadequate to me. I continued to ask questions regarding the purpose of filing a report, when I could expect results, and about other reasons that could explain this issue.

Then, after well over an hour on the phone with three different people, he said, “It’s possible the check hasn’t cleared yet. Sometimes it can take longer than usual.”

Two days later I logged into MyFedLoan and all was right with my consolidation.

The Moral of the Story

Student loan consolidation can be very poorly organized. Sometimes double debt shows up, sometimes it’s because a check hasn’t cleared, and sometimes it’s because “they forgot to mail it.”

This process can be a mess, and there is plenty of room for error. Thousands of your dollars are on the line, so pay close attention every step of the way.

About the Author

Student loan expert Michael Lux is a licensed attorney and the founder of The Student Loan Sherpa. He has helped borrowers navigate life with student debt since 2013.

Insight from Michael has been featured in US News & World Report, Forbes, The Wall Street Journal, and numerous other online and print publications.

Michael is available for speaking engagements and to respond to press inquiries.

17 thoughts on “My Student Loan Consolidation Adventure”

  1. It just happened to me today too. I only owed around $8,600 and I log in and it says I owe $17,000+…I’m not too worried because I figure they must be in the process of transferring things still seeing it’s the first day of the consolidation. I just found this article because I was wondering if anyone else had this problem.

  2. It happened to me as well and it’s Sept. 2022. It doubled and I was shocked especially knowing that I couldn’t reverse the consolidation. I’ll definitely be following-up this week. Your article surely brought my mind at ease, but just a little bit. Gotta wait to see the final results. Thank you Mr. Lux for sharing this info.

    • It also happened to me, but it never decreased. So I am still paying both the original balance and the consolidation loan. One loan says “school unknown”, the other has the university name attached to it. So glad for people who got this taken care of right away. But for those of us who didn’t, with double debt that never self-corrected, the loan companies are just making extra money. I don’t know what I can do about it at this point.

      • That absolutely should not have happened, and it definitely can and should get corrected. How long ago did you consolidate? Have you called your servicer to discuss the issue? What did they say?

  3. Thank you for the info! I just about had a coronary after checking on the next step of loan forgiveness (fingers crossed but not holding breath) only to see that the amount had doubled! I’m not sure how long it has been like this. I started the consolidation process about 3 weeks ago, but my credit score has since dropped, and I was denied a credit card when I was certain I would be approved. Now I know why.

  4. Thanks for writing this. I just about had a heart attack when I saw the principal balance. Hopefully I can take your advice and clear this up before payments resume.

  5. It’s still going on. I just called and had to try and convince them I’m not still a student. I tried to explain why my loans are doubled, that I did not take out a new loan a few days ago even though it says what the loans are for…right next to them (on my end of the Fedloan website at least). I’m hoping a check just needs to clear and will in a few days because there was no resolution on my end. Still seeing double debt. Good times. This article does make me feel better that it’s not just me, and no one else has that information out there, so thank you!

  6. I cosign everything Samantha just said. Thank you for sharing your experience. Now as I lay me down to sleep, my prayer is that I really am just “seeing double.” This HAS to be an error! **sigh… Thanks again, for hope!

  7. I literally just saw the same thing happen to my loans and had a full blown panic attack. What was even worse was that their hours of operation are closed so I can’t contact them right away. What a horrible feeling it is to see that you now owe DOUBLE the amount. I’m sooo glad I saw your blog because once I read it, I realized they didn’t take off my old loans on my account as well. Hopefully I get it resolved without having as much of an issue as you. Thank you for being so clear on what had happened and reassuring me that it’s not the actual amount that I need to repay. Just knowing that will help me sleep better tonight!

    • Hi Samantha,

      Thanks for taking the time to share your experience. This issue happened to me several years ago and I was starting to hope that they fixed it and maybe I should take down this article.

      I’m glad it helped you!


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