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If you make three voluntary, on-time, full monthly payments before consolidating, you can choose from any of the repayment plans available to Direct Consolidation Loan borrowers.

One option for getting your loan out of default is loan rehabilitation.

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.

Also, the record of default on the rehabilitated loan will be removed from your credit history.

However, your credit history will still show late payments that were reported by your loan holder before the loan went into default.

Another option for getting out of default is to consolidate your defaulted federal student loan into a Direct Consolidation Loan.

The two main ways to get out of default are loan rehabilitation and loan consolidation.

While loan rehabilitation takes several months to complete, you can quickly apply for loan consolidation.

However, loan rehabilitation provides certain benefits that are not available through loan consolidation.

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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