S T U D E N T D E B T M O D I F I C A T I O N S

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Welcome to Student Debt Modification

Student Loan Rehabilitation

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Student loan rehabilitation is for borrowers to get federal student loans out of default. Private student loans are not eligible for rehabilitation.

Rehabilitation takes longer than student loan consolidation, the other primary option for default recovery. But rehabilitation is generally the better choice because it:

Removes the default from your credit report. This will improve your credit score, though the late payments leading to the default will remain.

Eliminates additional collection costs. Rehabilitated federal direct loans are subject to collection costs, but those fees are not capitalized, or added to your loan balance.

You can only rehabilitate your loans once, so make sure you have a plan to continue making payments when you get out of default.

After student loan rehabilitation, your loan is usually assigned or sold to a new servicer. All collection activities stop though wage garnishment only ends after you make five rehab payments — and you’ll regain access to federal student aid and repayment options, such as deferment, forbearance and income-driven repayment.

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