U.S. Department of Education Loan Rehabilitation Programs

We offer two different Loan Rehabilitation Programs for borrowers whose loans are currently with the U.S. Department of Education.  For simplicity, we refer to these as “Option A” and “Option B.”  Importantly, while we may discuss both Options with you, you will need to specifically decline Option A before you may agree to rehabilitate your loan through Option B. 

The following information is applicable to both Option A and Option B Rehabilitation Programs.

Things You Need to Know About Loan Rehabilitation

  • Loan rehabilitation requires you to make a series of installment payments.  You must make a minimum of 9 voluntary, qualifying installment payments on time for the full amount due.  And to be on time, the payments must be received within 20 days of the due date.
  • The payments must be made within a period of 10 consecutive months, beginning with the month of the first payment due date. However, if you are trying to rehabilitate a Perkins loan, the 9 payments must be made within 9 consecutive months.  We will discuss your student loan types with you when we with speak with you on the phone.    
  • The Loan Rehabilitation program requires you to sign a Loan Rehabilitation Agreement.  Additionally, the different types of loan rehabilitation programs require you to provide us with supporting financial documentation. 
  • Any remaining collection fees on your loan(s) will be waived once your loan is rehabilitated. 
  • After you have made the 9 required, timely, qualifying payments and returned the required paperwork, your loan will be transferred to a new servicer.  You will need to continue making payments until your loan is transferred.
  • Once your loan is transferred, you will have to set up a new repayment plan with the new servicer. This may result in payments that are higher or lower than the payments you were making for the Loan Rehabilitation Program.

Option A: 15% Rehabilitation

    Calculation of Affordable Payment Amounts:

    • Your payment amount is calculated using your adjusted gross income and family size.
    • This plan does not take into account your actual expenses but instead makes an assumption of expenses based on poverty guidelines for your state of residence and family size.


    Supporting Documentation Required: You must provide us with documentation of your adjusted gross income and family size. The documentation can be:

    • A signed and completed Alternative Documentation of Income form;
    • Your completed IRS Federal Tax Return form from the prior year;
    • A complete IRS Transcript (using the “Tax Return” option), which is available by searching for “transcript” at www.irs.gov; or
    • A signed and completed Form 4506-T from the IRS authorizing GC Services to obtain your IRS Transcript.


Option B:  FIS Rehabilitation

    Calculation of Affordable Payment Amounts:

    • Your payment amount is calculated using your monthly income and expenses. 
    • Unlike Option A, here your actual monthly expenses are taken into consideration.  Option B might be a better solution for you if you have higher monthly expenses or special expenses, such as other student loan payments or wage garnishment withholdings.

Give us a call.  We can discuss the Loan Rehabilitation program, your options, and help you find the best solution for your student loan.