Loan Rehabilitation
Successful Federal Student Loan Rehabilitation Will Remove Your Loan(s) from Default
Find out if you qualify to participate in the loan rehabilitation program.
Overview
Some of the benefits of successfully completing the student loan rehabilitation program include:
- Bringing your federal student loan(s) out of a default status
- Requesting the deletion of ECMC's tradeline from your credit history
- Reinstating your eligibility for income-driven repayment options
- Making your federal student loan(s) eligible for applicable forbearance and deferment benefits
- Restoring your eligibility for future Title IV federal financial aid, including federal grants
Since the completion of the rehabilitation program and its benefits are only available one time, it is important that you are prepared to commit to making nine qualifying payments within the 10-month period. After the loan(s) has been removed from default and transferred to an eligible lender, your new lender or servicer will work with you to establish a new payment arrangement.
To inquire about rehabilitating your defaulted federal student loan(s), contact ECMC at 855-810-4922. Our hours of operation are Monday-Thursday, 7 a.m.-5 p.m., and Friday, 7 a.m.–4 p.m., Central time. To expedite a discussion of rehabilitation payment options, you should have your most recent federal tax return available when you call. You may also complete the rehabilitation application process online through the following link:
Click here to watch a short video about Loan Rehabilitation.
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What Entering Loan Rehabilitation Does
Loan rehabilitation can be a helpful tool for dealing with defaulted federal student loans. Just entering loan rehabilitation has immediate effects on your defaulted loan(s).
Entering into a loan rehabilitation agreement:
- Limits collection activity to those required by law and to communications that support the rehabilitation
- Limits the initiation of the administrative wage garnishment process
- May protect your state and federal tax refunds or other federal payments from offsets by the U.S. Department of the Treasury
- Restores your eligibility for future Title IV federal financial aid, including federal grants
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How Loan Rehabilitation Works
You and your loan holder(s) enter into a rehabilitation agreement that defines monthly payment amounts and due dates for your nine monthly payments during the 10-month period. The rehabilitation agreement you sign with your loan holder(s) will provide the monthly payment amount based on your financial status.
Once you consent to your rehabilitation agreement, you are obligated to make nine, on-time monthly payments within 10 months. You cannot make extra payments to speed up the process. If you fail to fulfill the terms of your rehabilitation agreement, your loan(s) will remain in default.
The rehabilitation is complete once a lender purchases the loan(s), which may not be immediately after the qualifying payments are made. Within 45 days of the loan(s) being transferred to an eligible lender, ECMC will request the national consumer reporting agencies (aka credit bureaus) to delete its tradeline from your consumer report, and your loan information will be updated on the Federal Student Aid (FSA). Once the defaulted loan(s) is removed from your FSA account profile, you may regain eligibility for deferments, forbearances and Title IV federal financial aid.
If you experience a delay in your loan account being updated on FSA, contact your loan holder(s) for help. If ECMC holds your loan(s), contact us at 855-810-4920.
If you default again after successfully rehabilitating your loan(s), you will not be able to rehabilitate this loan(s) again.
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Which Loans Quality for Rehabilitation
Only federal student loans are eligible for rehabilitation. These include:
- Federal Stafford loans (formerly GSL)
- Federal Perkins loans (formerly NDSL)
- Federal PLUS (Parent Loans for Undergraduate Students)
- Federal Grad PLUS (PLUS loans for graduate and professional students)
- Federal Consolidation loans
- Federal SLS (formerly ALAS)
- Health Professions Student Loans (HPSL)
- Nursing Student Loans (NSL)
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What Are Some of the Important Rehabilitation Limitations and Rules
Rehabilitation has important limitations and rules:
- Rehabilitation is a one-time-only opportunity. If you default after a successful rehabilitation, the program will not be available for this loan(s).
- Only a defaulted loan can be rehabilitated.
- Only certain loans qualify for rehabilitation, see above.
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Whom to Contact about Loan Rehabilitation
To rehabilitate your defaulted loan(s), contact ECMC at 855-810-4922. Our hours of operation are Monday-Thursday, 7 a.m.-5 p.m., and Friday, 7 a.m.–4 p.m., Central time. To expedite a discussion of rehabilitation payment options, have your most recent federal tax return available when you call. You may also complete the rehabilitation application process online through the following link: