Rehabilitation for Student Loans

Considering the high cost of college expenses it is not uncommon today for students to default on their loans. If your loan has gone into default it is important to recognize that options are available to you. Rehabilitation is one of these options.

Rehabilitation provides a way to reverse the default status on your loans and even delete that status from your credit record. To qualify for rehabilitation, you typically must have no legal judgment against the loan. Additionally, only loans that are already in default are eligible for rehabilitation.

Loans Eligible for Rehabilitation

• Stafford Loans
• Perkins Loans
• Health Education Assistance Loans
• Federal Consolidation Loans
• PLUS loans
• Health Professions Student Loan
• Nursing Student Loan

Rehabilitation Advantages

Rehabilitation provides a number of advantages for students with defaulted loans. These advantages include:

• Removal of loans from default status
• Deletion of default status from national credit bureaus
• Become eligible for same benefits that were available on the loans prior to default. These benefits include forbearance and deferment.
• End wage garnishment
• End withholding of income tax refund by Internal Revenue Service

There are some important facts regarding rehabilitation that you should be aware of based on the type of loan(s) you have.

Direct Loan borrowers should know they must make at least nine full payments of the agreed upon amount over a ten month period. The payments must be made within twenty days of the month due date. Any payments which are secured through litigation or wage garnishment do not count toward the nine required payments.

FFEL loan borrowers must also make nine full payments of the agreed upon amount over a ten month period, within twenty days of the monthly due date.

Perkins loan borrowers must make twelve monthly payments of the agreed upon amount. Like FFEL and Perkins, any payments that are secured through garnishment or litigation cannot be counted toward the twelve month requirement.

Feeling the pressure of student loan default? Let us help you sort through your options and find out if rehabilitation might be right for you. Studentloans.info can answer your questions, help you get started with the process and get your life back on track.