Consolidating student loans through department education

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To start the loan rehabilitation process, you must contact your loan holder.

If you’re not sure who your loan holder is, you can log in to “My Federal Student Aid” to get your loan holder’s contact information.

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If you can’t afford the initial monthly payment amount described above, you can ask your loan holder to calculate an alternative monthly payment based on the amount of your monthly income that remains after reasonable amounts for your monthly expenses have been subtracted.

However, your credit history will still show late payments that were reported by your loan holder before the loan went into default.

If you consolidate a defaulted loan, the record of the default (as well as late payments reported before the loan went into default) will remain in your credit history.

When your loan is rehabilitated, the default status will be removed from your loan, and collection of payments through wage garnishment or Treasury offset will stop.

You’ll regain eligibility for benefits that were available on the loan before you defaulted, such as deferment, forbearance, a choice of repayment plans, and loan forgiveness, and you’ll be eligible to receive federal student aid.

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