Students who are in default on federal student loans have two options to assist them in repaying their student loan obligation – Loan Consolidation and Loan Rehabilitation. Under both programs, the borrower must demonstrate an ability to repay the loan(s) by making regular, monthly payments. The basic requirements and advantages of each program are listed below:
Loan Consolidation Program
Loan Rehabilitation Program
Requires three consecutive monthly payments.
Requires twelve consecutive monthly payments.
Extends payoff up to 30 years.
Extends payoff up to 9 years.
All outstanding loans will be consolidated, and one monthly payment is required.
Negative information reported to credit bureaus will be removed.
Credit bureaus will be updated to reflect "Paid Collection" account.
NDSL/Perkins Loans are not eligible for Loan Rehabilitation.
For further information regarding these options, please call