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However, if you aren’t enrolling in the immediate future, you can still opt for rehabilitation and its benefits.
If you do, you need to make just six on-time payments according to your rehabilitation agreement to reapply for federal financial aid or have your school disburse your aid.
Not only will rehabilitation get your loans back on track, but it may also help your credit and lower your collection costs.
And, if you are going back to school, you typically become eligible for additional financial aid once your six payments into the rehabilitation process.
You can estimate what your rehabilitation payments will be here.
If you can't afford that amount, your loan holder will ask for more information about your expenses via this federal form to better understand your total financial circumstances.
Advantage: Once your loans are rehabilitated, the default will be removed from your credit history (though the delinquency will stay). Consolidating out of default is a faster way to get out of default than rehabilitation, but it doesn't have the same advantages.
You can consolidate your loans out of default by doing either of the following: This means that you can have your loans out of default in 3 months or less!
You can then choose between the 15% formula amount and the amount based off the more detailed information.
To do this, they will need information about your income, as well as the number of people in your family.
You can provide these details verbally over the phone; however, if you agree to this payment amount, you must submit proof that your income is what you said it was.
Each method has advantages and disadvantages, so let's run through those as well as how much extra each option will cost you.
(While you can fix some consequences of default depending on the option you choose, you will likely end up paying fees.
To regain this eligibility, your fastest solution would be consolidation.