Consolidating loans in default

If you are in default on your federal student loan payments, federal law provides two very powerful options for getting out of default: rehabilitation and consolidation.

Most lenders will offer both to you, with little explanation of the pros and cons of each.

Consolidation can take up to 30 days to process and complete after you have submitted your application.

That may seem much faster than the nine month rehabilitation plan.

Additionally, if you have multiple federal loans, you will have to rehabilitate each one individually.

If you are behind a few months in your student loan payments, you are technically not in default.

More importantly, it also means that you will be eligible to qualify for income based repayment plans.

These plans allow your payment to be as little as [[

If you are behind a few months in your student loan payments, you are technically not in default.

More importantly, it also means that you will be eligible to qualify for income based repayment plans.

These plans allow your payment to be as little as $0 based on your income, and after 20 to 25 years, any balance remaining on your debt is wiped out completely.

(Get the details on student loan consolidation.) Rehabilitation is a program where you make nine payments that are reasonable and affordable to you, regardless of what your actual student loan payment may have been before you defaulted.

After the last payment, your loan is rehabilitated, and you are out of default.

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If you are behind a few months in your student loan payments, you are technically not in default.More importantly, it also means that you will be eligible to qualify for income based repayment plans.These plans allow your payment to be as little as $0 based on your income, and after 20 to 25 years, any balance remaining on your debt is wiped out completely.(Get the details on student loan consolidation.) Rehabilitation is a program where you make nine payments that are reasonable and affordable to you, regardless of what your actual student loan payment may have been before you defaulted.After the last payment, your loan is rehabilitated, and you are out of default.

]] based on your income, and after 20 to 25 years, any balance remaining on your debt is wiped out completely.

(Get the details on student loan consolidation.) Rehabilitation is a program where you make nine payments that are reasonable and affordable to you, regardless of what your actual student loan payment may have been before you defaulted.

After the last payment, your loan is rehabilitated, and you are out of default.

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