Lenders consolidating federal student loans
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.
*NOTE: We previously indicated that loan consolidation would result in removal of the record of default from a borrower’s credit history.
That cell of the table has now been corrected to indicate that loan consolidation will not result in removal of the record of default from the borrower’s credit history.
If you rehabilitate a defaulted loan, the record of the default will be removed from your credit history.
Your required monthly payment amount is determined by your loan holder.
Find out where to go for information about your Perkins Loan.