However, the U.S. Department of Education has a loan rehabilitation program to bring defaulted student loans current. There are several reasons as to why you should take advantage of this program. When you enter into the program, risk of wage garnishment ends, and the IRS will no longer be able to withhold your income tax refunds.

Additional advantages take place after you have completed the loan rehabilitation program. The loan will no longer be in default status and will be considered current. Furthermore, the negative credit reports to the three national credit bureaus associated with the loan will be deleted. You will now also regain eligibility for the benefits that were originally available on your loans before the loan defaulted. These benefits may include deferment, forbearance, and Title IV eligibility.

There are some differences to the program depending on the type of loan that you are trying to rehabilitate. In all cases, you are required to make nine full, on-time payments of an agreed amount within twenty days of their monthly due dates to the Department of Education.

The aforementioned differences have to do with the lender who services your loan after you complete the program. A Direct Loan will be returned to the Direct Loan Servicing Center, a FFEL Loan may be purchased by an eligible lending institution, and a Perkins Loan will be serviced by the Department of Education until the loan balance is paid off.

Some things to keep in mind:

• Payments secured through involuntary means, such as wage garnishment or litigation, cannot be counted towards your nine payments.
• You are only allowed to perform loan rehabilitation once per loan. That means if your loan falls back into default, you will have few if any options, and you will more than likely be responsible for the remaining balance in full.

Many experts believe that we may be headed for another recession. Don’t enter a second recession with mountains of debt. I can help you to understand the options available to you for dealing with your debts. I am sure that I can be of assistance to you, to a family member, or to a friend as we all know people experiencing trouble these days even if we are not experiencing our own financial troubles. Please do not hesitate to make contact with me. I emphasize courteous and discrete consultations that fill your time with useful information. The impact to your life after an in-person consultation with me may be substantial, and life-long. You will enjoy a new peace of mind and a fresh hope for the future with a new roadmap for financial success that we develop together. You can contact my scheduler through our website for your free 30 minute consultation. If you wish, you may schedule your free 30 minute consultation by phone by calling us at 253-383-1001 Monday through Thursday from 9:00 AM until 5:45 PM, and on Friday from 9:00 AM until 12 noon.