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Consolidating a defaulted loan allows a borrower to pay off one or more federal student loans with a new direct consolidation loan.

Before paying off the debt through a consolidation loan, a borrower must either agree to repay the new direct consolidation loan under an income-driven repayment plan or make three consecutive on-time, voluntary full monthly payments on the defaulted loan.

There are other solutions for debt, including a debt management plan through a credit counselor, debt settlement or a consolidation loan.

A consolidation loan replaces multiple debts with a single loan, often at a fixed interest rate.

If they combine their federally backed loans into a federal direct consolidation loan before Wednesday, their previous payments on those loans will automatically be eligible for review.