Student Loan Default: PLUS Loan Rehabilitation Programs Can Help

PLUS loan rehabilitation programs were developed to help resolve late payments or student loan defaults on federal educational loans. Loans issued under the Federal Direct Student Loan Program and other types of federal financial aid carry certain terms and conditions that could result in aggressive action if a student loan default occurs. This is an important consideration because unlike other types of loans and debts, student loans are never “charged off” and you cannot include them in a bankruptcy. For this reason, it is critical to use programs like the PLUS loan rehabilitation to prevent the accumulation of fees, penalties and interest that occur with student loan defaults.


The PLUS loan rehabilitation program is specifically for parents who took out a PLUS loan to pay for the education of their dependent child, or for graduate or professional students who borrowed under the federal direct student loan program. However, the exact type of federal loan doesn’t really matter, as all federal student loans are eligible for some type of student loan rehabilitation.

In general, a PLUS loan rehabilitation works like other student loan default rehab programs. Any federal loans in question are combined into one loan, which makes management of federal loans much easier. When you apply for the program, you will be asked for certain information that will be used to determine what terms you are eligible for. In most cases, you will be able to get a reduced monthly payment amount and a reduced interest rate.

A PLUS loan rehabilitation also works to immediately get all fees and penalties stopped, and in some cases a small percentage of those fees are waived, especially if a student can show extenuating circumstances for the student loan default. Finally, any wage garnishments or tax levies in place as a result of the default or late payments will be immediately lifted.

In order to see if you qualify and to learn what your payments and interest rate can be reduced to, click here for the best PLUS loan rehabilitation.