Consolidating student loans after

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To start the loan rehabilitation process, you must contact your loan holder.

If you’re not sure who your loan holder is, you can log in to “My Federal Student Aid” to get your loan holder’s contact information.

To rehabilitate a defaulted Direct Loan or , divided by 12.

Discretionary income is the amount of your adjusted gross income (from your most recent federal income tax return) that exceeds 150 percent of the poverty guideline amount for your state and family size.

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.

Depending on your individual circumstances, this alternative payment amount may be lower than the payment amount you were initially offered.To rehabilitate your loan, you must choose one of the two payment amounts.Your loan holder may be collecting payments on your defaulted loan through wage garnishment or Treasury offset (taking all or part of your tax refunds or other government payments).To consolidate a defaulted federal student loan into a new Direct Consolidation Loan, you must either Note: If you choose to make three payments on the defaulted loan before you consolidate it, the required payment amount will be determined by your loan holder, but cannot be more than what is reasonable and affordable based on your total financial circumstances.There are special considerations if you want to reconsolidate an existing Direct Consolidation Loan or Federal (FFEL) Consolidation Loan that is in default: In addition, if you want to consolidate a defaulted loan that is being collected through garnishment of your wages, or that is being collected in accordance with a court order after a judgment was obtained against you, you cannot consolidate the loan unless the wage garnishment order has been lifted or the judgment has been vacated.

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