How to Get a Defaulted Student Loan Back in Good Status

A Defaulted Student Loan Is Not The End of The World!  
If you have a defaulted student loan, you are not at the end of the world! You can actually bring the loan out of default through a process called, “Loan Rehabilitation.”

In this session, we’ll define and explain the process that can help you get your finances and your dreams back on track.

What is Loan Rehabilitation?
In layman’s terms, it’s the process of pulling a student loan out of the default process.

There are some crucial reasons why you would want to take this route as soon as possible.

Reasons For Loan Rehabilitation
First and foremost, your loan(s) cease to being classified as being in “default status.” That alone is enough to pursue this restorative option.

Secondly, you become eligible for the exact same benefits that were available to you prior to the loans going into default status.

That means, all other things being equal, you may become eligible for deferment, forbearance, and Title IV.

Thirdly, your credit reports will no longer show your loan(s) as being in default status.

And finally, if you went through the horrifying experience of having your wages garnished, that disruptive order comes to an end. Which also means the IRS will no longer withhold your income tax refund. Now let’s examine the process for making this defaulted student loan relief happen.

Defaulted Perkins Loans – to rehabilitate a defaulted Perkins Student Loan, the process requires that you make nine consecutive “on time” monthly payments of an agreed amount. DULY NOTE: That does count payments you make on an involuntary basis such as payments made through any litigation or wage garnishment. As soon as you meet the required number of voluntary payments, your loan(s) will be taken out of default status.

Defaulted Direct Loans – the process to rehabilitate a Direct Loan is slightly different. You must make at least nine payments to the U.S. Department of Education on an agreed amount within twenty days of their monthly due dates over a ten month period. As stated previously, involuntary payments do not count. As soon as you meet the required number of voluntary payments, your loan(s) will be taken out of default status.

FFEL Loans - to process to rehabilitate a FFEL loan is the same as the process to restore a direct loan.

All in all, the premise of these programs is to help you get back on track and in good standing. Therefore, if you are feeling the pressure of a Defaulted Student Loan, it’s time to formulate a plan to turn things around.

Brad Matheson is a professional Financial Consultant who specializes in helping businesses and individuals resolve their debt issues. He believes that all debt problems can be solved with the right debt advice and aspires to help Americans learn all of their debt options and exercise all of their rights. Says, Matheson, “A Defaulted Student Loan doesn’t have to hinder or block your career aspirations or your dreams.”

Source: http://studentloanwhiz.com/