Federal Student Loan Rehabilitation

The federal student loan rehabilitation program is a temporary payment plan for student loans in default status. The borrower is required to make 9 on-time monthly payments, in a consecutive 9 or 10 month period. Perkins loans require the borrower make 9 monthly payments in a 9 month period. All other federal student loan rehab programs, require the borrower to make 9 monthly payments in a 10 month period. The federal plan allows the borrower to miss one payment in a 10 month period. Though, it is best if the borrower makes all 9 payments consecutively without fail to avoid potential problems.

Adam S. Minsky, Esq. established the first law firm in Massachusetts devoted entirely to assisting student loan borrowers, and he remains one of the only attorneys in the country with a practice focused exclusively in this area of law.

In this CLE class video clip, Adam explains the basics of the federal student loan rehabilitation program.

You can watch the complete Student Loan Debt Law CLE class here:
Student Loan Debt Law CLE

For non-Perkins student loans, the borrower has the right to reasonable and affordable monthly payments. These payments are set on a per individual case basis and the calculations of which use the 15% IBR formula. The 15IBR formula is the starting point to determine a “reasonable and affordable” payment, however borrowers can still request full financial review of household income and expenses. The minimum rehabilitation payment is $5.