When can a student qualify for financial aid after defaulting on a student loan?
A borrower who has defaulted on a student loan may regain eligibility by resolving the defaulted loan(s). This can be done in one of the following ways: • The defaulted loan(s) is paid in full. • The defaulted loan(s) is discharged or determined to be dischargeable in a bankruptcy action. • The borrower makes satisfactory repayment arrangements by contacting the loan holder for each of the loans defaulted, and makes those payments (as described below in the following question). Once the payment arrangements have been fulfilled, the borrower may regain eligibility. Note: A borrower may reestablish loan eligibility only once under these provisions. • The defaulted loan(s) has been rehabilitated. (See the response to the following FAQ.) • The defaulted loan(s) has been discharged because the student or parent borrower was unable to complete a program of study due to the school’s closing. • The defaulted loan has been discharged by the Department because the borrower’s eligibility for the
