Student Loan Rehabilitation Payment Amount: How It's Set and How to Get a Number You Can Keep

Short answer: A rehabilitation payment is set from your income and family size, not from what you owe. For a defaulted Direct Loan, the Education Department starts from what you'd pay on an income-driven plan, with a $5 minimum (rising to $10 on July 1, 2027). For an FFEL loan held by a guaranty agency, it's a set share of your income above a poverty-based threshold, with a $5 minimum. And if the first number doesn't fit your budget, you can ask for a recalculation based on your actual expenses.

Last updated: November 4, 2026. Checked against 34 CFR 685.211, 682.405 and 685.209 (eCFR), the May 1, 2026 final rule, StudentAid.gov's default pages and the 2026 HHS poverty guidelines.

At a glance:

• The deal: 9 voluntary, on-time monthly payments within 10 consecutive months. Each payment has to arrive within 20 days of its due date.
• What you get at the end: the loan leaves default, goes back to a regular servicer, and the default notation comes off your credit report.
• Minimum payment: $5 a month today. $10 for Direct Loans from July 1, 2027.
• Your agreement: the loan holder has to send a written agreement within 15 business days of setting your amount, and it has to say you can object.
• Collections right now: wage garnishment and Treasury offsets have been on hold since January 16, 2026, with no restart date announced as of November 4, 2026.

Why the old bill isn't your rehab number

If you're in default, chances are you tried to keep paying the regular monthly bill. Then a month got missed, then another, and the loan slid past 270 days. So when a rehab offer shows up, it's natural to brace for a number that looks like that old bill, or to say yes to whatever the collector suggests just to get started.

That's the part worth slowing down on. The rules don't tie a rehab payment to your balance at all. Both regulations say a "reasonable and affordable" payment can't be a set minimum like $50 if a smaller amount works for you, can't be a percentage of what you owe, and can't be based on anything unrelated to your finances. It's supposed to fit your life for nine months.

So the real question isn't "what do I owe?" It's "which formula applies to my loan, and what does it say about my income?" That depends on who holds the loan.

How the payment is figured for Direct Loans

If your defaulted loan is a Direct Loan, or an FFEL loan the Education Department now holds, the rule is 34 CFR 685.211(f), as updated by the May 1, 2026 final rule.

• Starting point: the payment you'd owe under an income-driven repayment plan you're eligible for.
• Floor: if that comes out under $5, the payment is $5. Beginning July 1, 2027, the floor is $10.
• Paperwork: the Department can set the amount from information you give by phone or online, then confirm your adjusted gross income (AGI) and family size with documents. If family size can't be documented, it uses a family of one. If requested income documents don't arrive by the deadline, the agreement is void.

There's also a newer option worth asking about. The regulation lets the Department offer a single application for rehabilitation and an income-driven plan at the same time. With your approval, it can use the income-driven figure as your rehab payment. And for a Direct Loan rehabilitated on or after July 1, 2026 through that single application, it can move you straight into the plan you chose once rehab is done. That's a big deal, because the jump from a small rehab payment to a regular bill is where a lot of people slip.

The Defaulted Loans Support Center, launched by Treasury and the Education Department on September 30, 2026, handles default options online, including rehabilitation applications and e-signatures. Our guide to the default portal explains how it works.

How the payment is figured for FFEL loans with a guaranty agency

Some older FFEL loans are still held by a guaranty agency, the organization named on your default notices. For those, 34 CFR 682.405 applies. FFEL rehab is a set share of income above a poverty-based threshold, so lower-income households often land at the $5 minimum. The $10 floor coming in 2027 is a Direct Loan rule, so it doesn't change this one.

The same protections apply here: no $50 minimums when less is affordable, no percentage of the balance, and a written agreement that tells you how to object.

Three hypothetical households, side by side

These examples are hypothetical, based on the 2026 poverty guidelines for the 48 contiguous states. For Direct Loans, they use the Repayment Assistance Plan (RAP) as one income-driven reference point, since RAP is the plan the 2025 law built for the years ahead. Your loan holder sets the actual figure in your agreement.

• Household 1, single, AGI $28,000: about $51 a month under the FFEL rule, and about $47 a month using RAP for a Direct Loan.
• Household 2, single parent with one child, AGI $24,000: the $5 minimum under the FFEL rule, and RAP's $10 minimum for a Direct Loan.
• Household 3, married with two kids, household AGI $55,000: about $69 a month under the FFEL rule, and about $129 a month using RAP.

Here's what jumps out. The two approaches don't rank the same way for everyone. For a single person, the RAP figure can come in a bit lower. For a larger family with a middle income, the FFEL figure can come in a lot lower. Picking the right reference point can be worth $50 or more a month, nine months in a row.

Now picture the Household 3 borrower being offered $200 a month because that's "close to the old bill." She takes it, makes four payments, then misses two when the car needs work. The clock starts over. A number based on her actual income would have kept her on track.

Which figure your offer uses is worth checking with a specialist. A quick call to (877) 770-0380 can help you see where your household lands.

When the first number doesn't fit: asking for a recalculation

This is the open door a lot of borrowers don't know about. If you object to the amount, orally or in writing, the loan holder has to recalculate it using a form it approves and, if it asks, supporting documents. The new number is based on:

• Your current disposable income, plus your spouse's if they contribute to the household. That includes benefits like Social Security, SSI, public assistance and workers' compensation.
• Your family size.
• Reasonable and necessary expenses: food, housing, utilities, basic phone and internet, necessary medical and dental costs, necessary insurance, transportation, dependent care and other work-related costs, legally required child and spousal support, and other student loan payments.

You then get a new written agreement with the recalculated amount, and you accept it by signing or accepting it electronically. If your situation changes partway through, say hours get cut or a new baby arrives, you can ask for an adjustment with the same kind of documentation.

The detail that matters most: this route looks at what you actually spend, not just what the tax return shows. For a household whose rent or child care eats most of the paycheck, that can change the picture. A specialist can help you ask for it.

Keeping the nine payments on track

Once the number fits, the rest is about rhythm.

• On time means within 20 days of the due date. A payment that lands later than that doesn't count toward the nine.
• Nine in ten months. You have room to miss one month, not two.
• Voluntary payments only. Money taken by garnishment or a tax refund offset doesn't count as a rehab payment.
• Garnishment and rehab together. If collections restart, garnishment on a Direct Loan is rescinded after your fifth qualifying rehab payment (FFEL garnishment is suspended at the same point), unless you ask otherwise. Before July 1, 2027, you get that benefit once.
• Some loans can't be rehabilitated, including a loan with a court judgment against it.
• A rehab you don't finish doesn't use up your chance. Only a completed rehabilitation counts toward the limit. If you've already completed one and defaulted again, see our page on rehabilitating a loan a second time.

After the ninth payment, the loan moves to a regular servicer such as Aidvantage, CRI, Edfinancial, MOHELA or Nelnet. That's where the plan you pick matters. An income-driven plan keeps the bill tied to your income, and our IDR recertification deadline page covers keeping it that way.

If you're still choosing between rehabilitation and consolidation, our guide on how to get student loans out of default compares both paths, and the collections pause update tracks where garnishment and offsets stand.

Smart next steps

• Find out who holds the loan. The Education Department or a guaranty agency decides which formula applies.
• Get a number built on your real income. Before you sign, make sure the amount reflects your current household, not your balance or your old bill.
• Talk it through before you commit to nine months. A call to (877) 770-0380 gets your federal loans reviewed with a specialist, who can go over the income-driven figure, the recalculation option and the plan to pick when rehab ends.

What to have ready before you call

• Your most recent default notice or rehabilitation offer, including who sent it and the amount.
• Your latest tax return or recent pay stubs, and your household size.
• A rough list of monthly costs: rent, utilities, child care, transportation and medical bills.
• Any letters about garnishment or tax refund offsets (screenshots are fine).

Related reading: student loan wage garnishment, RAP explained, and the student loan default hub.

Frequently asked questions