Student Loan Rehabilitation — Remove Default Status With Nine Affordable Payments
What Is It?
Federal student loan rehabilitation is one way to get a defaulted federal student loan out of default. After successful completion, the default status is removed and collections stop.
What Most People Don’t Know
- It usually requires nine on-time payments under a rehabilitation agreement.
- The monthly payment is not automatically your old scheduled payment.
- This is different from consolidation.
Frequently Asked Questions
How many payments are required?
A: Federal Student Aid says Direct Loan and FFEL borrowers generally must make nine on-time payments during a period of 10 consecutive months.
What changes after rehabilitation?
A: Default status is removed, collections stop, and eligibility for federal student aid is restored.