Satisfactory Repayment Arrangement

What is Satisfactory Repayment Arrangement?

Satisfactory Repayment Arrangement meaning If you are in default on a federal student loan, you may regain eligibility to receive federal student aid, or may become eligible to consolidate the defaulted loan, if you make a satisfactory repayment arrangement with the loan holder.For the purpose of regaining eligibility to receive federal student aid, a satisfactory repayment arrangement requires you to make six consecutive, voluntary, on-time, full monthly payments on the defaulted loan. You can regain eligibility to receive federal student aid by making a satisfactory repayment arrangement on a defaulted loan only one time.For the purpose of consolidating a defaulted loan into a Direct Consolidation Loan, a satisfactory repayment arrangement requires you to either

  • make three consecutive, voluntary, on-time, full monthly payments on the defaulted loan before you consolidate it; or
  • agree to repay the Direct Consolidation Loan under the Pay As You Earn Repayment Plan, the Revised Pay As You Earn Repayment Plan, the Income-Contingent Repayment Plan, or the Income-Based Repayment Plan.

 

reference: Federal Student Aid – Glossary

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