If you have federal student loans, you may be able to consolidate your student … Loan rehabilitation can be tricky, but with proper counseling and representation, this will be a huge benefit to those in default.”. Another way to get out of default on a federal student loan is to consolidate it. If you are able to get out of default through rehabilitating or consolidating your loans, you will once again be eligible for the more flexible pre-default repayment options as well as deferments.. Income-Driven Repayment Plan Forgiveness For federal student loans, the standard repayment period is 10 years. Federal student loan borrows have three options for getting out of default. The rehabilitation plan for default allows you make payments based on income. After your 9th payment, the default status will be removed, and your loans will be back in good standing. The Federal Student Loan Rehabilitation Program offers borrowers who have defaulted on their student loans a way to get out of default, and back into repayment, but it does something even better than that, because it also removes the default status from your credit report as well. Pay a new monthly payment based on 15% of your discretionary income. You have to make 9 monthly payments within 9 months. This means that you can get yourself out of default before your loans get sent to collections. Avoid default and learn how to turn a “Default” status into a “Current” status in under 90 days by using our Road Map to Getting Student Loans Out of Default. That said, it’s never too late to resolve an old debt and get your student loans out of default. Consolidation can be a good option for getting out of default, as long as you’re able to commit to the repayment plans it requires. A federal student loan is considered to be in default if payments haven’t been made for 270 days. Top Strategy: Rehabilitate your federal student loans to get them out of default. The two main post-default repayment programs for government loan borrowers are consolidation and rehabilitation. Enter a Loan Rehabilitation Agreement. Getting out of default on federal student loans is hard, but not impossible. The best way to get out of default is not to get … All loans in collections are in default, but not all loans in default are in collections. Read on for the top two strategies for getting your federal student loans back into good standing. Unlike federal student loans, private student loans will typically have higher interest rates and your loan could be in default after 120 days or 4 months of missed payments. Who do I contact to get started on a rehabilitation program for defaulted student loans? With federal student loans there are two realistic ways to get your student loans out of default and a third option that’s out of reach for most borrowers. Your student loans most likely ended up in default because you did not make payments for a long period of time–typically 270-360 days. Student loan refinancing. If you do fall so behind that your loans go into default , there are options — especially if you have federal loans. Getting Your Private Student Loans Out of Default. Each student loan servicer has a process for getting student loans out of default. Getting your student loans out of default will require the borrower to be proactive and take action to get back into good standing. So, getting out of private student loan default is very different compared to federal loans. Not making payments on your student loans was what got you into student loan default, so it makes sense that getting out of default requires some amount of money being paid towards your balance. Your second option on how to deal with this situation is based on logic and the facts. There are typically three options for getting out of default: 1) pay the debt off in full, 2) consolidate your student loans and begin making payments, or 3) rehabilitate your loans. Your servicer will ask for a document like a tax return or a pay stub. The first thing you need to do is re-track down your student loans. I chose to rehabilitate my loan. One great way to get out of default is to consolidate your federal student loans to a Direct Consolidation Loan. If you have private student loans, you can’t qualify for loan rehabilitation or … Many … If your private loan is in default, there's no simple prescription for dealing with the lender or collection agency. To find your servicer, log in to the Federal Student Aid website or call the Default Resolution Group if your defaulted loans have been transferred to a collection agency. You can consolidate into a Direct Consolidation Loan, even if you only have one federal student loan. After a number of monthly, on-time payments, your loan will be out of default. If you have not paid your federal student loans in 270 days, then your loan is officially in default and you qualify. Another option for getting out of default is loan consolidation, which involves obtaining a new loan to pay off the defaulted federal student loan. Loan rehabilitation allows you to get out of default by making 9 monthly payments within 10 months. If you are thinking about defaulting on your student loans, ask the lender whether you are eligible for a deferment or forbearance before you default. Perkins loans have different rules. If a 10-year repayment period makes … Your private student loan may default if you miss just one or two payments -- or automatically, if you file bankruptcy or default on another loan. One option that’s available is a rehabilitation program. Student loan rehabilitation is a one-shot opportunity for borrowers to get federal student loans out of default. 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