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Loan Default
Repayment Requirements |
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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
1-800-4-FEDAID
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