Rehabilitating A Student Loan

Rehabilitating A Student Loan

When you are facing a financial crisis and unable to make your student loan payments, it can be difficult to decide which alternative to choose. There are many options available for people who cannot afford their monthly student loan payments including forbearance, repayment agreement, or rehabilitation program. Each option has different consequences and benefits, so it’s important that you take into consideration all the pros and cons before making a final decision


Forbearance is a period of time when the borrower does not have to make payments on a federal student loan. Forbearance is an option for borrowers who are having financial difficulties.

For example, some people use forbearance if they are facing a short-term hardship that makes it difficult to repay their loans. A common example is unemployment or illness.

In some cases you may be able to receive additional time as well as lower your monthly payment amount. However, forbearance does not change the terms of your loan and interest will continue to accrue while in this status unless it’s already deferred through deferment or cancellation options available on federal student loans or state programs

Repayment Agreement

If you’re having trouble making your student loan payments, a repayment agreement is a good option for you. A repayment agreement can be initiated by contacting your loan servicer directly or by submitting an application online. If you are experiencing financial hardship, it may be possible to extend the time-frame of your payment plan at no additional cost.

In order to be considered for these options, there are certain requirements that must be met:

  • You must have received a notice from your loan servicer requesting payment (this could happen via email or snail mail).
  • You need to negotiate with your lender before they will offer any kind of short-term solution like forbearance or deferment.

You should also consider speaking with an attorney if this is something that interests you because there may be other options available which do not involve making payments outside of what was agreed upon in your original contract with the lender or credit card company

Rehabilitation Program

You can rehabilitate a loan if you are in default for more than 270 days. The rehabilitation program is designed to help borrowers get out of default and back on track with their student loans. If your student loan is still in default after the grace period expires, it’s possible that your lender may be able to offer you this option.

  • You must have missed at least one monthly payment within the last 270 days (the most recent 9 months).
  • Your current account balance must be less than $7,500.

Taking into consideration all the benefits and consequences of each alternative, you can decide which option may be best for you because there are some factors to be considered before making a final decision.

It’s important to consider all of your options before making a decision.

  • Benefits
  • Consequences

No one-size-fits-all solution. The best repayment option for you is the one that allows you to meet your financial goals and balance out the benefits and consequences of each alternative.

If you are struggling to make payments on your student loans, there are several options available to help you get back on track. If none of these work for you, then your best bet would be to talk with a specialist who can give personalized advice about how best to handle your situation.

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