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Posts: 6
Registered: ‎01-12-2017
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I have several student loans in default.. rehab, consolidation?

Hi everyone, 


Thanks for reading this. Long story short I have 4 student loans in default right now, I went through some really hard financial times but now I am working on this because my credit score took a huge hit, right now one of the scores is 470 Smiley Sad I am not sure about the others but they are all very low. The loans are the main thing and are making it hard to get approved for anything so repairing my credit is a huge priority right now. My question is what is the best option? I read that the student loans can only be rehabalitated one loan at a time, this worries me because this will take forever to fix and my wages will be garnished by then, itll be 3 years or so if each will take 9 months to get out of default. I read that consolidating them into one loan and then defaulting and then rehabbing them might be a good option, but honestly this sounds like messing with the system and i dont want to get myself into more trouble. what can i do??

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Epic Contributor
Posts: 29,575
Registered: ‎03-19-2007
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Re: I have several student loans in default.. rehab, consolidation?

Are they private or federal student loans?

New Member
Posts: 1
Registered: ‎04-08-2017
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Re: I have several student loans in default.. rehab, consolidation?

Is it possible you misread? Rehabbing is a one shot deal-you can only go through it one time, but I just did this and thisnwasnt my experience.

For me, the process was fairly painless and handled by a collection agency working for the Dept of Ed. They set up 10 auto payments (9 are required but we did the 10th for a window until the loans (plural intentional) go to the new servicer. At that point, the DOE will remove the collection tradelines and the new servicer will handle the loans from there. It's my understanding, if you consolidate instead of rehabbing, you give up the opportunity to have those collection accounts removed from your credit file. My research lead me to think that rehabbing first was the better option, then consolidating, but that's my take on the process. Good luck!

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