With payments as low as $5.00 a month for eligible borrowers, completing the rehabilitation program will get you out of default and may ease the burden of wage garnishments and tax-offsets.
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Benefits of Rehabiliatation
Your monthly payments are based on your current financial situation.
Wage garnishment may be suspended after 5 qualifying payments.
Once the loan is rehabilitated:
Collection efforts stop.
The remaining collection fees will be waived.
Tax-offsets (IRS withholding of tax refunds) related to the rehabilitated loan will be discontinued.
Defaulted loans on the credit bureau no longer show as defaulted; all negative trade lines may be removed.
Eligibility for Title IV assistance (Federal Student Aid) may be reinstated.
You may be eligible for loan forbearance or deferment on your newly rehabilitated loan.
How Rehabilitation Works
Rehabilitation is simple. FAMS will work with you through every step to ensure you fully understand the process. To begin:
Provide FAMS with your household income, family size, and ALL monthly expenses.
The FAMS Agent will use the information to get the lowest possible payment based on your financial situation.
Confirm your agreement with the payment amount and terms of the rehabilitation program.
Establish the due date and method of payment that works best for you.
Send proof of your household income, family size, and expenses to FAMS via email, fax, or our convenient online upload form.
Sign and return the rehabilitation agreement letter.
After all required rehabilitation documents have been returned and you have made 9 timely, qualifying voluntary payments according to the terms of your agreement, the loan will be rehabilitated.
Are You Eligible?
Your loans are eligible unless:
You completed a rehabilitation for the loan on or after 08/14/2008.
The loan has a current judgment.
The loan is a Pell Grant
If you have other loans that do not meet the above criteria, rehabilitation may still be possible for those loans. Please contact your FAMS agent for more information.
Payments made 20 days before or after the established due date are qualifying payments. If you cannot make a payment within this timeframe, please contact your FAMS agent right away for assistance.
It depends on your loan type. For Perkins loans, payments prior to the missed payment may not count towards your rehabilitation, and you may not be able to complete the rehabilitation. If you know in advance that you will miss a payment, contact FAMS as soon as possible and an agent will assist you.
If you completed the Rehabilitation program prior to 8/14/2008, you are eligible for those loans. If you completed the Rehabilitation on or after 8/14/08, you are no longer eligible.
Possibly. Once your rehabilitation is complete, the default status is removed and the loan is returned to the loan servicer. At that time you can request a repayment plan that meets your financial needs, or request deferment or forbearance.
No. Payments secured from you on an involuntary basis, such as through wage garnishment or litigation, cannot be counted toward your rehabilitation payments.
Typically, 60-90 days after the final rehabilitation payment has been made the account will be removed from default, and the U.S. Treasury records will be updated by the U.S. Department of Education.
You can determine if you are still certified for tax offset by calling the U.S. Department of Treasury at (800) 304-3107.
Financial Asset Management Systems, Inc. is a debt collection agency. This is an attempt to collect a debt, by a debt collector, and any information obtained will be used for that purpose. Calls to and from FAMS may be monitored and/or recorded.
