Student Loan Rehabilitation Made Simple.
Student Loan Rehabilitation help starts here.
Defaulted federal student loans can be stressful. However, student loan rehabilitation may offer a path forward. It lets eligible borrowers return their loans to good standing through a payment agreement.
First, we’ll help you understand your loan status. Next, we’ll explain the rehabilitation process and possible payment amounts. Then, you can decide whether you want help preparing documents.
Free first review. Optional paid document assistance. StuLo is not a government agency.
What Is Student Loan Rehabilitation?
Student Loan Rehabilitation helps eligible federal loan borrowers get out of default. Instead of replacing the loan, you make qualifying payments under an agreement with your loan holder. After successful completion, the default status comes off the loan.
Return to Good Standing
Completing rehabilitation ends the loan’s default status. As a result, you regain access to federal repayment benefits.
Address Credit Reporting
After completion, the loan holder requests removal of the default record. However, earlier late-payment history may remain.
Plan Your Next Payment
Rehabilitation is only the first step. Therefore, compare repayment plans before your regular payments resume.
Who Qualifies for Federal Student Loan Rehabilitation?
Rehabilitation generally applies to eligible federal loans in default. For example, Direct Loans, certain FFEL loans, and Perkins Loans have rehabilitation processes. However, the payment schedule differs by loan program.
Private student loans do not use the federal rehabilitation program. Therefore, confirm your loan type before choosing a solution.
- Identify loans currently in default
- Find your federal loan holder
- Check prior rehabilitation history
- Understand the correct payment schedule
- Review alternative paths out of default
How Student Loan Rehabilitation Works
Rehabilitation takes several steps. First, contact your loan holder. Next, sign the written agreement and make qualifying payments. Finally, confirm that your loan leaves default.
Locate Your Loans
Review your account at StudentAid.gov. Then, identify your loan holder and default status.
Arrange Payments
Provide income details and review the payment offer. If needed, request an alternative amount.
Make Payments
Direct and FFEL borrowers generally make nine qualifying payments within ten consecutive months.
Confirm Completion
After rehabilitation, verify your new servicer. Next, choose an affordable repayment plan.
Perkins Loan exception: Defaulted Perkins Loans generally require nine consecutive qualifying payments. Also, involuntary collections do not count as voluntary rehabilitation payments. Check your written agreement for exact requirements.
How Much Are Rehabilitation Payments?
For many Direct and FFEL borrowers, the standard rehabilitation payment uses 15% of annual discretionary income, divided by 12. However, some loans use different rules. Your loan holder sets your actual payment.
If the amount is unaffordable, ask about an alternative calculation. For example, your loan holder may review income, housing, medical bills, and other reasonable expenses.
Use the calculator to explore an estimate. Then, confirm the approved amount with your loan holder before signing.
Student Loan Rehabilitation vs. Consolidation
Both options can resolve certain federal student loan defaults. However, they work differently. Therefore, review the credit implications, timing, and future repayment choices.
Student Loan Rehabilitation
- Uses a series of qualifying payments
- Typically takes at least nine months
- Can remove the reported default record
- Usually available only once per loan
- Earlier late-payment history may remain
Direct Loan Consolidation
- Combines eligible federal loans into a new loan
- May resolve default more quickly
- Can require extra steps for defaulted loans
- Does not erase past default credit reporting
- May affect existing loan benefits
Official guidance: Compare your choices on Federal Student Aid’s getting-out-of-default page before making a decision.
What Happens After Loan Rehabilitation?
Once you successfully rehabilitate a loan, the loan holder transfers it to a new servicer. As a result, you can access federal loan benefits again.
However, rehabilitation does not cancel your debt. Your regular repayment schedule resumes after the transfer. Therefore, review available payment plans early.
For example, an income-based plan may better fit your budget. Use StuLo’s IBR calculator to explore estimates before selecting a plan.
Rehabilitate Your Student Loans Yourself or Get Help?
You can access federal rehabilitation services at no charge. However, some borrowers prefer support reviewing instructions and preparing documents.
Use Free Federal Resources
- Contact your federal loan holder directly
- Review required documents and forms
- Request an affordable payment amount
- Track qualifying payments independently
- Pay no StuLo service fees
Choose StuLo Assistance
- Start with a free initial assessment
- Get help organizing loan information
- Understand rehabilitation requirements
- Choose optional paid document preparation
- Learn what to ask your loan holder
Student Loan Rehabilitation FAQs
Have questions about getting out of default? Start with these short answers. Then, contact your loan holder to confirm the rules for your loans.
Student Loan Rehabilitation Basics
How many rehabilitation payments must I make?
Direct and FFEL loans generally require nine voluntary, on-time payments in ten consecutive months. However, Perkins Loans require nine consecutive payments. Your agreement sets the exact schedule.
Can I rehabilitate a federal student loan more than once?
Generally, you can rehabilitate the same loan only once. Therefore, make sure you can meet the agreement before starting.
Can private student loans use federal rehabilitation?
No. Federal rehabilitation rules apply to eligible federal loans. Instead, contact your private lender about its hardship or default-resolution options.
Rehabilitation Payments and Credit Reporting
Can I request a lower rehabilitation payment?
Yes, you may request an alternative payment calculation when the initial amount is unaffordable. For example, the loan holder may review your income and necessary expenses.
Does rehabilitation remove late payments from my credit report?
Successful rehabilitation can remove the loan’s default record. However, previously reported late payments may remain. Therefore, it does not guarantee a credit score increase.
Collections and Rehabilitation
Will wage garnishment stop immediately?
Not necessarily. Involuntary collections may continue during rehabilitation. However, qualifying payment milestones or completion can change collection activity. Ask your loan holder for details.
Do garnished wages count toward my nine payments?
No. Rehabilitation requires qualifying voluntary payments. Therefore, wage garnishment alone does not satisfy the nine-payment requirement.
Completing Rehabilitation and Finding Help
Will loan rehabilitation forgive my balance?
No. Rehabilitation removes the loan from default when successfully completed. However, it does not erase the amount you owe.
Where can I apply for free?
Contact your federal loan holder. For official instructions, visit Federal Student Aid’s rehabilitation guide. StuLo’s document help is optional.
Can StuLo guarantee approval or a lower payment?
No. Your loan holder determines eligibility and payment terms. However, StuLo can help you understand options and prepare documents.
Student Loan Rehabilitation Resources
Use reliable information as you compare choices. In addition, keep copies of your agreement, financial documents, and payment confirmations.
Official Rehabilitation Guide
Review federal rules and payment steps on StudentAid.gov.
Read the federal guideRehabilitation Calculator
Explore a possible payment amount before speaking with your loan holder.
Estimate a paymentIBR Calculator
Prepare for the repayment plan you may use after leaving default.
Explore IBR estimatesTake Your Next Step Toward Getting Out of Default
You do not have to guess about federal rehabilitation rules. Instead, begin with a free StuLo assessment. Then, decide whether optional document help fits your needs.
Get My Free Student Loan AssessmentImportant: StuLo is a private student loan assistance and document preparation company, not the U.S. Department of Education. Federal student loan rehabilitation is available without paying StuLo. You can find free official information at StudentAid.gov. StuLo offers a free initial review and optional paid document help. StuLo cannot guarantee rehabilitation approval, a lower monthly payment, an improved credit score, or debt forgiveness. Your federal loan holder makes final decisions.