Consolidating to a direct loan


These involuntary payments may continue even after you begin making payments under a loan rehabilitation agreement, but they can’t be counted toward the required nine voluntary loan rehabilitation payments.

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Take a look at the chart below to compare the benefits of loan rehabilitation versus the benefits of loan consolidation.

*NOTE: We previously indicated that loan consolidation would result in removal of the record of default from a borrower’s credit history.

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.

Late payments will remain on your credit report for seven years from when they were first reported.