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You may want to consider rehabilitating your defaulted
loan(s). Advantages of rehabilitation include:
- Your loan(s) will no longer be considered to be in a
default status.
- The default status reported by your loan holder to the
national credit bureaus will be deleted.
- You will be eligible for the same benefits that were
available on the loans before the loans defaulted. This may
include deferment, forbearance, and Title IV eligibility.
- Wage garnishment ends and the Internal Revenue Service
no longer withholds your income tax refund.
If you are a Direct Loan Borrower:
To rehabilitate a Direct Loan, you must make at least
nine (9) full payments of an agreed amount within twenty
(20) days of their monthly due dates over a ten (10) month
period to the U.S. Department of
Education (Department). Payments secured from you on an
involuntary basis, such as through wage garnishment or
litigation, cannot be counted toward your nine (9) payments.
Once you have made the required payments, your loan(s) will
be returned to the Direct Loan Servicing Center.
If you are a FFEL loan borrower:
To rehabilitate a FFEL, you must make at least nine (9)
full payments of an agreed amount within twenty (20) days of
their monthly due dates over a ten (10) month period to the Department. Payments secured from
you on an involuntary basis, such as through wage
garnishment or litigation, cannot be counted toward your
nine (9) payments. Once you have made the required payments,
your loan(s) may be purchased by an eligible lending
institution.
If you are a Perkins loan borrower:
To rehabilitate a Perkins Loan, you must make twelve (12)
on-time, monthly payments of an agreed amount to the
Department. Payments secured from you on an involuntary
basis, such as through wage garnishment or litigation,
cannot be counted toward your twelve (12) payments. Once you
have made the required payments, your loan(s) will continue
to be serviced by the Department until the balance owed is
paid in full.
Please contact us for
additional information on the loan rehabilitation program.
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