If you’ve defaulted on loans, HESC’s Rehabilitation Loan Program gives you the opportunity to have those loans removed from default and to become eligible for student financial aid.
Program Overview
Here’s how the program works:
You must have made nine consecutive, voluntary, agreed-upon monthly payments. If HESC is getting money to pay back your loan by taking some of your tax refund money, or taking money out of your paycheck (garnishing wages), you’re not eligible for another student loan because these payments are not voluntary. NOTE: A good way to pay back your student loan is by enrolling in SmartPay, our preauthorized electronic debit service.
The monthly payment must have been made within 20 days of the due date.
You must agree to pay a fee of up to 18.5% of the unpaid principal and accrued interest. These costs are added to your unpaid balance when the loan or loans are sold to the lender. This fee is about the same as the collection cost you’re paying on the defaulted loan. The collection costs are removed before being purchased by the new lender, then the one time fee of 18.5 percent is added.
After your loan’s rehabilitated, HESC will notify all national credit bureaus that your loan is no longer in default, important when you’re trying to repair your damaged credit.
HESC will mail you an application if you are interested in the Rehabilitation Loan Program.
More Information
For more information, contact HESC at 1-866-944-4372(select option 7) or cleancredit@hesc.org. You may also be eligible for consolidation to remove your loans from default.
