SO In Default

[twosense]

Hello, my husband owed about 160 for grad school. We sent them up on an income driven repayment program and are paying $5 a month. I asked how much it would cost to "get the status from default to positive." The rep laughed hard and said paid in full. Then, I asked a few follow up questions -- like why are on a program if we'll be in default at the end anyway? These loans were started prior to our marriage -- about 20 years ago. I looked at Student Aid website and more. I believe my husband defaulted on his consolidation and/or payment agreements. 

We are about to come into a little bit of money through work and gifts. I was calling to determine how much we could pay to bring the account current. 

Any advice..?

[calyx]

You say that he may have defaulted on his consolidation - has he rehabbed previously?
Because of the age - I am curious - are these FFEL consolidated loans?

Basically - if he has NOT rehabbed loans previously, he can do that.  But if he defaulted on rehabbed loans, that option has been removed.

He can reconsolidate consolidated FFEL loans into a Direct Loan, which would bring them current as a new loan (though the defaulted loan would remain on his credit report).

The only other option would be to pay the loan in full - but I would look into rehab or (FFEL -> Direct) consolidation if they are options.
If it's a federal student loan and in default, those are your three possible options (assuming your SO hasn't already used rehab and/or consolidation).   

[twosense]

Thank you for responding. Let me do some research. 

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@calyx wrote:

You say that he may have defaulted on his consolidation - has he rehabbed previously?
Because of the age - I am curious - are these FFEL consolidated loans?

Basically - if he has NOT rehabbed loans previously, he can do that.  But if he defaulted on rehabbed loans, that option has been removed.

He can reconsolidate consolidated FFEL loans into a Direct Loan, which would bring them current as a new loan (though the defaulted loan would remain on his credit report).

The only other option would be to pay the loan in full - but I would look into rehab or (FFEL -> Direct) consolidation if they are options.
If it's a federal student loan and in default, those are your three possible options (assuming your SO hasn't already used rehab and/or consolidation).   

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