Most people with student loans are probably already aware that the Coronavirus Aid, Relief and Economic Security (CARES) Act,  passed March 27, 2020, allowed most student loan borrowers to get an interest-free forbearance on student loan payments.  Many people do not know that this is also an opportunity for student loan borrowers who are in default status to get their loans back into good standing.

Once a student loan borrower is in default status, they can return to good standing by going through the Loan Rehabilitation.  To rehabilitate student loans from default status, the borrower must make nine voluntary monthly payments.  The amount of the monthly payments is based on the borrower’s income. For borrowers whose wages are being garnished, the garnishments do not count as voluntary payments.  That can make it difficult for borrowers to get out of default status.

However, the CARES Act forbearance months counts towards the nine-month requirement.  And for borrowers who were being garnished, that is also paused by the CARES Act. If you are a student loan borrower in default status, contact your lender immediately to get started rehabilitating your student loans!