Student Loan Law: 8.6.4.4 Raising Defenses After a Loan Has Been Consolidated
A loan consolidation has significant benefits for most student loan borrowers in default.355 However, one problem is that consolidating a student loan may make it more difficult to raise defenses to collection on that loan in litigation. The lender may argue that the new consolidated loan is a novation and that defenses to the old loan do not apply to the new loan.