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student loan rehabilitation program

How Student Loan Rehabilitation Works

The following blog post explains how to enroll in a student loan rehabilitation program, as COVID-19 Emergency Relief ends on January 31, 2022. This type of program is for anyone that’s behind on federal student loan payments. Student loan rehabilitation can re-age your account payment history to show “current on payments” and help you avoid wage garnishment. You can easily wipe away those late payment marks and get back in good standing with your federal student loan creditors.

Federal student loan wage garnishments are going to skyrocket in the United States after Biden’s COVID-19 Emergency Student Relief expires on January 31, 2021. Currently, federal student loan payments are on interest-free forbearance (and student loan payments are paused) with no payments due, and collections on defaulted loans have been halted due to Biden’s COVID-19 Emergency Student Relief. But following January 31, 2021, all collections activity and payments due will be resuming. Consequently, many students are not prepared to deal with their defaulted loans, and come January 31, 2021, many students will be hit with wage garnishment. Hopefully, if you have defaulted on federal student loans, you’re reading this guide now and have sufficient time to take action.

For credit card relief options and help with paying off your unsecured debt (not counting federal student loans), read this page next. You may also contact a Debt Counselor at Golden Financial Services for help with over $10,000 in unsecured debt at (866) 376-9846.

Are your wages getting garnished due to delinquent student loan debt? A student loan rehabilitation program will also stop wage garnishment. If you fell behind on student loan payments, student loan rehabilitation is your best solution.

What happens after completing loan rehabilitation and getting accounts back in good standing?

After your accounts are back in good standing you can then proceed with federal student loan consolidation, income-based repayment plans, and loan forgiveness. At Golden Financial Services we can assist you with all of the following or you can do it on your own following the step-by-step instructions provided for free at

What if my wages were already garnished, will loan rehabilitation help?

Loan rehabilitation offers you an opportunity to get a fresh start. In addition, the plans are affordable and quick to complete.

You can complete a loan rehabilitation program within 5-9 months. Immediately after finishing it – the wage garnishment STOPS!

If your wages have not been garnished as of yet, but you’re in default on your federal student loans, you need to start a loan rehabilitation program immediately. Otherwise, your wages will eventually get garnished, and the problem only gets worse.

Benefits of loan rehabilitation:

  • The default payment status gets removed from credit reports.
  • Payment status gets refreshed to show “current on monthly payments.”
  • Garnishment STOPS.
  • Eligibility to apply for forbearance and student loan consolidation gets restored.
  • Eligibility to apply for an income-driven repayment plan gets restored.
  • Eligibility to apply for student loan forgiveness gets restored.

The downside of doing the loan rehabilitation:

  • The wage garnishment payment will continue to get taken out each month until you complete the loan rehabilitation program (you could be paying the garnishment and loan rehab payment for the next five to nine months)

What will loan rehabilitation do for me?

First major benefit:

Loan rehabilitation will repair your credit, getting the past-due payment notations removed from your credit report and re-aging the payment status to show “current.”

Second major benefit:

Your federal benefits get restored, so you’ll be able to use federal student loan consolidation, income-based repayment plans, and eventually loan forgiveness.

Who offers a student loan rehabilitation program?

Every federal student loan third-party debt collector offers student loan default rehabilitation.

Navient, Great Lakes, and Sallie Mae all offer loan rehabilitation programs. In addition, if your accounts are with a third-party collection agency, they will also provide this program for you.

How to get on a loan rehabilitation program?

Contact your student loan lender.

Let them know:

“I need to get on the loan rehabilitation program for my student loans.”

They will transfer you to the correct department. You can do almost everything over the phone.

They will ask you a series of questions, but the most important questions pertain to your gross income and family size.

How is your monthly payment determined on a student loan rehabilitation program?

Student loan third-party debt collectors use a similar calculation as what’s used to calculate the monthly payment on an income-based repayment plan (e.g., Pay As You Earn or IBR) to calculate the monthly rehabilitation payment.

The student loan rehabilitation program monthly payment will be based on your family size and gross income. Look at your income for the last three months. Is there a particular month that shows a lower amount?  Use that lowest month’s worth of income to calculate your annual adjusted gross income. Give the student loan lender that amount over the phone. They will then require you to send that month’s worth of paystubs, which you can easily do!

Additional Resources for Debt Relief Post COVID-19

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