(B) a percentage of the borrower`s total loan balance; or you can get federal aid authorization before completing rehabilitation, as long as you make six reasonable and affordable monthly payments. However, you need to complete rehabilitation to get out of the default setting. (10) Other Titles IV and Non-Title IV Student Loan Payments; and (i) For the purposes of this section, the payment means the full payment of a reasonable and affordable amount, based on the borrower`s financial terms agreed by the borrower and the Agency. Voluntary payments are those made directly by the borrower and do not include payments made by compensation, seizure, income or execution of the estate or after judgment on a loan. A security agency must try to secure a lender for the purchase of the loan at the end of the 9 or 10-month payment period. Loan holders can add the collection fee to the new loan balance, but this should not exceed 16% of the outstanding principal and interest accrued at the time the loan is sold. The Department of Education says it does not collect these fees from borrowers who rehabilitate direct loans, but that they are subject to a fee for each of the nine qualified payments. Once full eligibility for the pardon is obtained, only the balance of the principal and interest of the loan is transferred to a non-insolvent service provider. No other collection fees will be levied from that date unless the borrower defaults on the loan. This policy could change, so it is a good idea to ask whether, after the pardon, the government will incorporate collection costs into your balance. (ii) the loan was sold to an eligible lender or assigned to the secretary. (i) an eligible lender applying for a rehabilitated loan must establish a repayment plan that meets the same requirements as other FFEL loans of the same nature as the rehabilitated loan and allows the borrower to choose a legal repayment plan for this type of loan. The lender must process the first payment under the nine payments as the first payment within the maximum repayment period in force, in accordance with the provisions of S.
682.209 a or e. For consolidation loans, the maximum repayment period is based on the remaining balance to be repaid at the time of credit rehabilitation. You can renew eligibility for new loans and grants and eliminate credit default by “rehabilitating” a defaulted loan. To qualify for FFEL or Direct Loan rehabilitation, you must make 9 monthly payments within 20 days of maturity, over 10 consecutive months. The 9 out of 10 rule normally allows you to miss your payment for a month, but still has the right to rehabilitate. (i) the borrower received nine of the ten imputations required as part of a monthly repayment agreement.