Student Loan Rehabilitation

If you are currently in default on a federal student loan and you are interested in pursuing an option that offers the lowest monthly payment or the greatest benefit to your credit, you may benefit from rehabilitation.

• Rehabilitation means that your loan will be taken out of default status after you make a series of consecutive (generally, nine) on-time, monthly payments.

• You have the right to set your payments based on how much money you make. Your payments can be as low as $5 per month if you are unemployed or have very little income. Your debt collector is required by law to offer you this income-driven rehabilitation payment plan.

Rehabilitation won't repair your credit completely—your previous missed payments may still show up on your credit report—but any default notation will be removed. Your servicer or debt collector may ask you to provide documentation to demonstrate that you need a lower payment than they are suggesting. When negotiating with your debt collector, the law requires your collector to determine your payment amount based on your income; however, once you agree to a payment plan, you are required to make your monthly payment in order to rehabilitate your defaulted loan.

Contact your servicer or debt collector to learn more about your options and to make arrangements to bring your loan out of default.

Ask the debt collector for specific information about fees. The costs associated with bringing your loan out of default may vary substantially depending on your individual circumstances.

Do you have mounting student loan debt? Want to learn about all of the available payment options? Call Project THRIVE at (856) 258-0064 TODAY.