Loan Rehabilitation

What is Loan Rehabilitation?

Loan Rehabilitation meaning The process of bringing a loan out of default and removing the default notation from a borrower’s credit report. To rehabilitate a Direct Loan or a FFEL Program loan, the borrower must make nine voluntary, reasonable, and affordable monthly payments within 20 days of the due date over a consecutive 10-month period. To rehabilitate a Perkins Loan, a borrower must make a full monthly payment (of an amount determined by the school) within 20 days of the due date, for nine consecutive months.


reference: Federal Student Aid – Glossary