Rehabilitation

What is rehabilitation?

Loan rehabilitation is a program available to borrowers who have defaulted on their National Direct Student Loan (NDSL) or Perkins Loan. You must contact the MU Student Loan Collections Office by phone or in writing to request rehabilitation of your NDSL or Perkins loan. We will send you an "Agreement for Rehabilitation" form which you must complete and return to us. After we receive and approve the completed form, your loan will be placed in an "IN REHAB" status. You must make 12 ON-TIME CONSECUTIVE MONTHLY PAYMENTS in order for your loan to be rehabilitated. The monthly payment amount will be determined by the University of Missouri-Columbia and will be part of the "Agreement for Rehabilitation".

Bills are printed on the 15th of the month and payments are due on the 1st of the month, approximately 2 weeks later. A late payment will automatically void the rehabilitation agreement and you will have to re-apply for rehabilitation. Even if you have made 11 monthly rehabilitation payments on time and the 12th payment is late, your rehabilitation agreement will be automatically voided and you will have to re-apply for rehabilitation and start over at payment one.


What are the benefits of rehabilitation?

After receipt and processing of the 12th payment, your loan(s) will be considered "rehabilitated" and:

• Your rehabilitated loan will be returned to regular repayment status and you will be given an additional 9 years to repay your loan(s); however, this is subject to the minimum monthly payment amount specified in your promissory note.
• You will re-establish eligibility for Title IV Student Financial Assistance (as long as you are otherwise eligible).
• The default on the rehabilitated loan(s) will be removed from your credit history.
• You will be eligible for any remaining balance of benefits and privileges on your original promissory note.
• You will be responsible for the terms of your promissory note which include, but are not limited to, informing us of address changes, making regular on-time payments, and notifiying us of the need for flexible repayment arrangements.

A defaulted loan may be rehabilitated one time only.