It's no secret that managing your student loans can be challenging. If you've fallen behind on your payments, you may be afraid that there's nothing you can do to get back on track. That's not the case. We can help you handle even the most complex education debt issues.

Federal student loans enter default when payments become more than 270 days past due. There are serious consequences of default, but there are also ways to repair the situation - paying the loan in full, entering a rehabilitation program, or possibly consolidating out of default.

The benefits of completing these options include:

  • You can regain eligibility for additional financial aid.

  • Your wages and tax refunds will not be garnished.

  • Your loan will no longer be immediately due in full.

  • You can regain access to unused deferment and forbearance time.


Payment in Full
Paying the total amount you owe principal, interest and costs is the fastest way out of default.

Paying in full may not make sense for you, but try to pay as much as you can right away. Collection costs of up to 25% are applied to your loan balance 60 days after your loan defaults, so decreasing your balance can help decrease these costs.


To rehabilitate your loans, you need to make nine on-time qualifying payments. Remember, each of the nine payments must be made within 20 days of the due date over a ten month period and voluntary in order to count towards rehabilitation. If your wages are being garnished, you will have to make these voluntary payments in addition to the garnishment. Once you make the first five payments under the rehabilitation program, the garnishment order will be suspended. You may only receive the benefit of this suspension once so it's important to keep making those rehabilitation payments on time.

Loans rehabilitated on or after August 14th, 2008 only receive the rehabilitation opportunity once, so it's important to have a good plan in place once your loan is out of default.

F.H. Cann & Associates, Inc.

1600 Osgood Street, Suite 2-120 

North Andover, MA 01845

11499 Chester Road, Suite 101 Sharonville, OH 45246

© 2020 by F.H. Cann & Associates, Inc.

All Rights Reserved.

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