Student Loan Rehabilitation (REHAB)
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.
💡 Reminder: Enter amounts without commas (type 15000 instead of 15,000).
💡 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 under the Loan Rehabilitation Program:
Standard 15% Formula – Based on 15% of your discretionary income, where:
- Discretionary income = AGI – (1.5 × federal poverty guideline for your family size)
- Monthly REHAB payment = discretionary income × 15% ÷ 12 (minimum payment is $5)
Alternative Calculation – Based on your actual income and necessary expenses, often resulting in a lower, more affordable payment amount.
Your REHAB payment is calculated using the latest 2025 HHS federal poverty guidelines, which differ for Alaska and Hawaii.
If your discretionary income is zero or negative, your REHAB payment will be $5/month, the minimum amount allowed under program rules.
Our REHAB Calculator helps you estimate your reasonable and affordable payment before submitting your information to your loan holder.
✅ 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