Rehabilitation Student Loans
If you have a student loan that’s in default, the Department of Education may be able to help. Rehabilitation is a process designed to get your loans out of default and back on track. If you qualify for rehabilitation, your loan servicer will work with you to create a rehabilitation plan that will allow you to make arrangements to start making payments again.
Rehabilitation is available for Direct Loans, FFEL Program loans issued through Oct. 1, 1993, Perkins Loans first disbursed before Sept. 30, 1995 or Federal Family Education Loans (FFEL) first disbursed on or after Oct 1, 1992 and before July 1, 2010 (those made under the Federal Family Education Loan Program – FFELP).
What are Rehabilitation Student Loans?
You may have heard of rehabilitation before. Rehabilitation is a way to get out of default on your federal student loans, and it’s available as an option for borrowers who meet certain criteria.
If you decide to rehabilitate your loans, you will need to make nine monthly payments within 10 months (120 days). After that time period has passed, the default status on your account should be removed and any collections activity will be halted. At this point—and only at this point—you can once again apply for federal student aid such as grants or loans.
When do I have to begin repaying my student loan?
If you leave school before finishing your program, you must begin repaying your student loan within 60 days of leaving school. If you were in a grace period and left school, you must begin paying off your debt within 30 days of leaving.
You can also defer (delay) repayment while still in school or during the grace period if:
- You’re taking at least half-time academic study or work experience related to your degree (if under age 50).
- You had a permanent disability that made taking classes hard on you.(Permanent disabilities include physical disabilities like deafness, blindness and mobility impairment.)
How do I request a review of my loan rehabilitation?
If you have questions about loan rehabilitation, contact your loan servicer.
To request a review of your loan rehabilitation, submit a Request for Review (PDF) form. You may also ask that your request be reviewed by the Secretary if you believe that the basis for denial is not justified. When requesting an appeal or review and providing documentation to support it, keep in mind that all documents must be submitted within 30 days of the date on which notification of your decision was sent to you (or 15 days after receiving notice from us if there is an error in our notice). If we do not receive any additional information from you by these deadlines, we will proceed with processing without considering new information or evidence.
To learn more about rehabilitation, call your loan servicer or visit https://studentaid.gov.
To learn more about rehabilitation, call your loan servicer or visit https://studentaid.gov
If you’re not able to pay off your loans due to a long-term disability such as chronic illness or injury, you may be able to have them forgiven under certain conditions. Rehabilitation is a process that allows eligible federal student loans (and some private ones) to be discharged if you can show that you’ve made satisfactory payments on the loan over at least 10 years while working full-time in an eligible occupation and living below the poverty line.
The Department of Education has created a website with information about rehabilitation and how it works: https://studentaid.gov/repay-loans/forgiveness-cancellation/discharge-rehabilitation
If you are having trouble making payments on your federal student loan, you might be able to restructure your student loans through a loan rehabilitation process. This is a way to get out of default and start making payments again on time. If you want more information about how this process works and whether or not it is right for you, then contact us today!