Help!  I live in San Diego and want to know if I can get my student loans out of default with a loan rehabilitation?  I can’t pay my federal student loan to Navient.  My loan is now in default and the US Department of Education is sending their debt collectors after me, I’m afraid of a federal student loan wage garnishment!  How can I get my student loan out of default with a loan rehabilitation?

How To Get Student Loan Out Of Default With Loan Rehabilitation

Do I qualify for a student loan rehab?

If you have not paid your federal student loans in 270 days, then your loan is officially in default and you qualify.


Who do I contact to get started on a rehabilitation program for defaulted student loans?

You can directly contact your loan holder and try to handle the process yourself.  Or you can call me for a free consultation.  Even if you don’t live in San Diego, I am happy to discuss your options.


What do I say to the loan holder if I decide to handle my own student loan rehab?

You let the loan holder know that you are calling because your loan is in default and you cannot afford your current payment and that you would like to put your loan into a loan rehabilitation.


How does a student loan rehab work?

A loan rehabilitation for a defaulted federal student loan is based on your current income.  You should only be paying what you can afford.  If you make 9 reduced payments during a 10-month period, then your loan will be considered current.  Meaning your loan will no longer be in default. The reduced amount of payments is based on your discussion with your loan holder.


How do I know how much I can afford to pay each month?

When you request a loan rehabilitation from your loan holder, you’re often working with a collection agency that may try to collect an unaffordable payment. This is against the law, as you are only required to pay what’s reasonable and affordable. The loan holder should discuss your options, which will focus on your income and household circumstances.  If you don’t feel confident in being able to reach an affordable amount, then contact a debt relief attorney for advice.  


What are the benefits of a loan rehabilitation?

Once your loan is current from a loan rehab, then:

  • The “default” status of your loan is removed
  • The negative marks on your credit from the default are removed
  • Your wages will not be garnished
  • Your federal income tax refund won’t be seized as permitted under the Treasury Offset Program
  • You’re now able to take advantage of other programs intended to assist borrowers having trouble making payments, such as forbearances, deferments and programs like the US Department of Education’s Income Based Repayment Plan (IBRP).


Daniel R. Gamez, an attorney focusing exclusively in debt relief, is licensed to practice in all state and federal courts in California and Texas. Mr. Gamez owns and operates the Gamez Law Firm in San Diego, CA. For more information, please contact Daniel Gamez at 858-217-5051, or use our online contact form. Stay updated with the latest debt relief tips by following on Facebook and Twitter!