How to Fill Out and Submit the Student Loan Rehabilitation Form

The Student Loan Rehabilitation Income and Expense Information Form (OMB No. 1845-0120) is what you use to ask for a lower monthly rehabilitation payment when the standard calculation on your defaulted federal student loan is more than you can afford. Your loan holder first sets your payment at 15 percent of your discretionary income. If that figure is too high, you request this form, document your actual income and expenses, send it back with proof, and your loan holder recalculates a payment based on what you can genuinely pay for the nine months of rehabilitation.¹

When You Actually Need This Form

You only need the Income and Expense form if you’ve already told your loan holder you want to rehabilitate and you’ve seen the standard payment amount they calculated. That standard amount for FFEL loans is 15 percent of the amount by which your Adjusted Gross Income exceeds 150 percent of the federal poverty guideline for your family size and state, divided by 12, with a $5 minimum.² For Direct Loans, the starting figure is based on the Income-Based Repayment plan minimum, with the same $5 floor.³

A quick example. A single borrower in the contiguous states with an AGI of $30,000 has a 2026 poverty guideline of $15,960 for a household of one, 150 percent of which is $23,940.⁴ Discretionary income is $6,060. Fifteen percent of that is $909, which comes out to roughly $75.75 a month. If rent, groceries, and medical bills make $75 impossible, you object to that amount and ask for the alternative calculation. That triggers this form.

Under the alternative calculation, your loan holder sets aside the 15 percent formula and looks only at the income and expenses you report. The resulting payment can be well below the formula amount, and for borrowers with little disposable income, it can go as low as $5 per month.⁵

Finding Your Loan Holder and Getting the Form

Log in at studentaid.gov and open your dashboard. Under “My Loan Servicers,” a servicer name starting with “DEPT OF ED” means the Department of Education holds the loan directly. You can also reach the Default Resolution Group through myeddebt.ed.gov to be pointed to the right loan holder.⁶

Call your loan holder, say you want to rehabilitate, and ask for the alternative payment calculation once you see the 15 percent amount. They will send you the form. It is also downloadable as a PDF from studentaid.gov.⁷

What to Gather Before You Start Writing

Your loan holder can ask for documentation on any number you put on the form, so pull paperwork together before you sit down with it:

Your most recent federal tax return (AGI is on line 11 of Form 1040) plus recent pay stubs if your income has shifted since filing. Add your spouse’s income documentation if they contribute to the household.
Rent receipts or mortgage statements, property tax bills, and homeowner’s or renter’s insurance premiums.
Utility bills covering water, electricity, gas, and basic phone or internet service.
Medical and dental bills, co-pay receipts, prescription costs, and insurance premiums not covered by an employer.
Car payment statements, auto insurance, fuel receipts, or public transit passes.
Court orders for child or spousal support and proof you’re paying them.
Statements for any other federal or private student loans you are paying.

The regulations tell your loan holder which expense categories to consider: food, housing, utilities, basic communications, medical and dental costs, insurance, transportation, dependent care, work-related expenses, legally required support, and other student loan payments.² Anything outside these categories needs separate approval, so put your evidence into these buckets.

Filling Out the Form

The form has six sections. You fill out the first four. Sections 5 and 6 are instructions and definitions.

Section 1: Borrower Information

Enter your Social Security number, full name, address, phone numbers, and email. If your contact information has changed since the loan defaulted, check the box at the top of the section flagging updated information. A wrong SSN or an old address is one of the fastest ways to stall the file, because this is how the loan holder matches the form to your defaulted account.⁷

Section 2: Household Income and Monthly Expenses

Report total monthly gross income from every source: wages, tips, public assistance, Social Security, workers’ compensation, and anything else coming in. Include your spouse’s income if they contribute to the household. If they do not contribute, you can leave their income out.⁷

Below the income lines, itemize your monthly expenses in the categories the form lists: rent or mortgage, insurance, property taxes, utilities, phone, food, clothing, medical and dental, transportation, dependent care, child or spousal support, and other student loan payments. Use true monthly amounts. If you’re paid weekly, multiply by 4.33. If you’re working from annual figures, divide by 12.

Be thorough. Any legitimate expense you leave off widens the gap between your income and your costs, which pushes your calculated payment up. Also keep every figure defensible, because the loan holder can request a receipt or statement for any line item.

Section 3: Family Size and Spouse Identification

Your family size includes you, your spouse, and your children, including unborn children expected before the end of the calendar year, when those children get more than half their support from you. It also includes anyone else living with you who gets more than half their support from you and will continue to for the year you’re certifying.¹ A larger family size helps you, because it raises the poverty guideline threshold in the calculation.

You also identify your spouse here by name and SSN. Spousal income still only counts if your spouse contributes to household costs. Filing taxes as Married Filing Separately does not automatically exclude a spouse’s income; the test is contribution, not filing status.

Section 4: Certifications and Signature

Signing certifies that everything you reported is true and that you’ll provide more documentation if asked. You are also acknowledging that your loan holder will calculate the alternative payment using only what you provided, and that if you reject both the 15 percent amount and the alternative amount, rehabilitation does not move forward.¹ An unsigned form is rejected automatically.

Submitting the Form

Send the signed form and every supporting document to your loan holder or the collection agency assigned to your account. Most loan holders accept mail or fax. For loans serviced by the Default Resolution Group, which handles most defaulted federal student loans, submission is by fax or postal mail.⁸ Some servicers also run secure upload portals; check the servicer’s website or call to confirm. If you mail your package, use a tracked service so you have proof of delivery.

After the package arrives, your loan holder reviews your income and expense claims against the documents you sent. Neither the regulations nor Department of Education guidance sets a fixed review timeline, so expect several weeks. When review is done, you receive a formal notice with your approved monthly payment. That notice starts your nine-month rehabilitation window.

What Happens After You Submit

To rehabilitate a defaulted Direct Loan or FFEL loan, you must make nine voluntary, on-time payments within 10 consecutive months, each arriving within 20 days of its due date.³ The 10-month window gives you room to miss one month and still finish on schedule. Federal Perkins Loans are stricter: nine consecutive payments with no gap.⁸

Once you make the ninth qualifying payment, your loan holder asks the credit bureaus to remove the default notation from your file. Late payments your original servicer reported before default stay on your credit history.⁹ Your loan transfers to a new servicer, and you regain access to federal student aid, deferment and forbearance, and income-driven repayment plans.⁸

One warning worth keeping in front of you while you fill out the form: federal law allows you to rehabilitate a given loan only once. If this loan defaults again later, you cannot rehabilitate it a second time, and you would be left with full repayment or Direct Consolidation.⁷ That is a reason to report your expenses accurately and ask for a payment you can actually sustain, rather than one that looks reasonable on paper and breaks you in month four.

1
Federal Student Aid. Student Loan Rehabilitation Income and Expense Information Form
2
eCFR. 34 CFR 682.405 – Loan Rehabilitation Agreement
3
eCFR. 34 CFR 685.211 – Borrower Defenses and Loan Rehabilitation
4
HHS ASPE. 2026 Poverty Guidelines
5
Federal Student Aid. Getting Out of Default
6
Federal Student Aid. Collections on Defaulted Loans
7
Federal Student Aid. Loan Rehabilitation Income and Expense Information Form
8
Federal Student Aid. Student Loan Rehabilitation for Borrowers in Default: FAQs
9
Federal Student Aid. Student Loan Default and Collections: FAQs