Student Loan Rehabilitation
Repair your default. Rebuild your credit. Restart your future.
If your federal student loans are in default, the Loan Rehabilitation Program lets you get back on track — and back into good standing — with affordable monthly payments based on your income and expenses.
💡 What Is Loan Rehabilitation?
Loan Rehabilitation is a one-time opportunity to remove a default from your credit report by making 9 on-time, affordable monthly payments within 10 consecutive months.
Once complete:
- Your default status is removed from your credit history.
- You regain eligibility for federal aid, deferments, and forbearances.
- Your loan is transferred to a new servicer and placed back in good standing.
💰 How Your Payment Is Calculated
There are two ways your monthly payment can be determined:
- Standard 15% Formula: Based on 15% of the income that exceeds 150% of the poverty guideline for your family size.
- Alternative Calculation (via this calculator): Based on your real income and necessary expenses, often resulting in a lower, more manageable payment.
Our calculator helps you estimate your reasonable and affordable payment before submitting the official form.
✅ How to Qualify
To successfully rehabilitate your loan:
- Make 9 voluntary, on-time payments within 10 months.
- Provide income and expense information (and documentation if requested).
- Sign a rehabilitation agreement with your loan holder.
You can only rehabilitate a specific loan once, so it’s important to stay current after completing the program.
⚙️ How the Process Works
- Estimate your payment using the calculator below.
- Submit your information to your loan holder (they’ll confirm your payment amount).
- Make your 9 payments — on time and in full.
- Graduate from default and regain access to repayment plans like Income-Driven Repayment (IDR).
📈 Why It Matters
Rehabilitation is the fastest path to:
- Repair your credit score
- Stop wage garnishment and tax refund offsets
- Qualify for lower payments under IDR plans
- Rebuild eligibility for new loans or grants