"Loan Rehabilitation: Income and Expense Information"

A Loan Rehabilitation: Income and Expense Information Form, is a legal document used by Collection Agencies to calculate the size of an affordable minimum monthly payment for the loan rehabilitation program.

Alternate Names:

  • Federal Loan Rehabilitation Form.

The U.S. Department of Education has approved new revisions for Loan Rehabilitation Income and Expense Information form. This is the newest version of the form and filers should disregard the OMB Control Number. This form will not expire and if it does - we will have it replaced. A fillable Federal Loan Rehabilitation Form is available for download below.

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Federal Loan Rehabilitation Form Instructions

Why rehabilitate your loans? To get Public Assistance (payments one receives under a federal or state program) if such a need occurs due to family circumstances, and to regain the benefits of the various loan programs for a repayment plan on previously defaulted loans with a monthly payment amount based on an individual's income.

The purpose of the Federal Loan Rehabilitation Form is to get the right size payment based on income and expenses. To prepare the information needed for filing all necessary information on a form, some documents like pay stubs or proof of other income for the last 90 days have to be collected as well as documented necessary expenses (receipts and such). Only certain expenses qualify as necessary expenses. It is the cost of groceries and housing (including utility and insurance costs), communication costs (ie phone bills), necessary medical and dental, child care, some student loans, etc. An AGI, or Adjusted Gross Income, will have to be calculated based on this information. AGI is an individual's total gross income minus allowed deductions (expenses).

There are two ways to calculate monthly payment: It can be 15% of your monthly discretionary income (subtracting 150% of the poverty guidelines for the family size, divided by 12 from a calculated AGI); or calculating income and expenses using the Federal Loan Rehabilitation Form. The federal poverty guidelines are set by the Census Bureau (Issued annually by the Department of Health and Human Services).


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LOAN REHABILITATION: INCOME AND EXPENSE
OMB No. 1845-0120
Form Approved
INFORMATION
Exp. Date 5/31/2020
William D. Ford Federal Direct Loan (Direct Loan) Program / Federal Family
Education Loan (FFEL) Program
WARNING: Any person who knowingly makes a false statement or misrepresentation on this form or on
RIE
any accompanying document is subject to penalties that may include fines, imprisonment, or both, under
the U.S. Criminal Code and 20 U.S.C. 1097.
SECTION 1: BORROWER INFORMATION
Please enter or correct the following information.
Check this box if any of your information has changed.
SSN
Name
Address
City
State
Zip Code
Telephone - Primary
Telephone - Alternate
Email (Optional)
SECTION 2: HOUSEHOLD INCOME AND REASONABLE AND NECESSARY MONTHLY EXPENSES
You received this form because you asked to rehabilitate your defaulted loans, but objected to the payment amount your
loan holder calculated using the 15% formula (see Section 6). After receiving this form, your loan holder will offer an
alternative payment amount. The alternative amount may be less or more than the amount calculated using the 15%
formula. To begin rehabilitating your defaulted loans, you must choose between the two amounts. To rehabilitate, you must
make 9 on-time payments of that amount over a period of 10 consecutive months.
Provide the monthly income and expense information listed below. Include documentation of these sources of income or
expenses if your loan holder asks you to. Include your spouse's income only if your spouse contributes to your household
income. Your loan holder has the authority to determine if the claimed amount of any expense is reasonable and necessary.
Before entering your monthly income and expenses, carefully read the entire form, including Sections 5, 6, and 7.
MONTHLY INCOME
MONTHLY EXPENSES
10. Food
1. Your employment income
11. Housing
2. Spouse's employment income
3. Child support received
12. Utilities
4. Social Security benefits
13. Basic communication
14. Necessary medical/dental
5. Worker's compensation
15. Necessary insurance
6. Public assistance
16. Transportation
List types
7. Other income
Number of vehicles
17. Child/dependent care
Describe
8. Total monthly income (sum
18. Required child/spousal support
of items 1 through 7)
19. Federal student loan payments
9. If your total monthly
20. Private student loan payments
21. Other expenses
income is $0, explain
your means of
Describe
support
22. Total monthly expenses (sum
of items 10 through 21)
Continue to Sections 3 and 4 on page 2.
Page 1 of 5
LOAN REHABILITATION: INCOME AND EXPENSE
OMB No. 1845-0120
Form Approved
INFORMATION
Exp. Date 5/31/2020
William D. Ford Federal Direct Loan (Direct Loan) Program / Federal Family
Education Loan (FFEL) Program
WARNING: Any person who knowingly makes a false statement or misrepresentation on this form or on
RIE
any accompanying document is subject to penalties that may include fines, imprisonment, or both, under
the U.S. Criminal Code and 20 U.S.C. 1097.
SECTION 1: BORROWER INFORMATION
Please enter or correct the following information.
Check this box if any of your information has changed.
SSN
Name
Address
City
State
Zip Code
Telephone - Primary
Telephone - Alternate
Email (Optional)
SECTION 2: HOUSEHOLD INCOME AND REASONABLE AND NECESSARY MONTHLY EXPENSES
You received this form because you asked to rehabilitate your defaulted loans, but objected to the payment amount your
loan holder calculated using the 15% formula (see Section 6). After receiving this form, your loan holder will offer an
alternative payment amount. The alternative amount may be less or more than the amount calculated using the 15%
formula. To begin rehabilitating your defaulted loans, you must choose between the two amounts. To rehabilitate, you must
make 9 on-time payments of that amount over a period of 10 consecutive months.
Provide the monthly income and expense information listed below. Include documentation of these sources of income or
expenses if your loan holder asks you to. Include your spouse's income only if your spouse contributes to your household
income. Your loan holder has the authority to determine if the claimed amount of any expense is reasonable and necessary.
Before entering your monthly income and expenses, carefully read the entire form, including Sections 5, 6, and 7.
MONTHLY INCOME
MONTHLY EXPENSES
10. Food
1. Your employment income
11. Housing
2. Spouse's employment income
3. Child support received
12. Utilities
4. Social Security benefits
13. Basic communication
14. Necessary medical/dental
5. Worker's compensation
15. Necessary insurance
6. Public assistance
16. Transportation
List types
7. Other income
Number of vehicles
17. Child/dependent care
Describe
8. Total monthly income (sum
18. Required child/spousal support
of items 1 through 7)
19. Federal student loan payments
9. If your total monthly
20. Private student loan payments
21. Other expenses
income is $0, explain
your means of
Describe
support
22. Total monthly expenses (sum
of items 10 through 21)
Continue to Sections 3 and 4 on page 2.
Page 1 of 5
Borrower Name
Borrower SSN
SECTION 3: FAMILY SIZE AND SPOUSE IDENTIFICATION
Your family size includes you, your spouse, and your children (including unborn children who will be born before the end of
the current calendar year), if the children will receive more than half of their support from you. Your family size includes other
people only if they live with you now, receive more than half of their support from you now, and will continue to receive this
support from you for the year for which you are certifying your family size. Support includes money, gifts, loans, housing,
food, clothes, car, medical and dental care, and payment of college costs.
23. Family size
24. Are you requesting rehabilitation of a Direct Consolidation Loan or a Federal Consolidation Loan that was made jointly to
you and your spouse?
Yes. Enter your spouse's name and SSN:
Spouse's SSN
Spouse's Name
No. Continue to Section 4.
SECTION 4: UNDERSTANDINGS, CERTIFICATIONS, AND AUTHORIZATION
I understand that:
1. I have received this form because I requested the opportunity to rehabilitate my defaulted loans and objected to the
reasonable and affordable monthly payment amount calculated using the 15% formula.
2. My loan holder will calculate an alternative reasonable and affordable monthly payment amount that will be based
solely on the information I provide on this form and, if requested, supporting documentation.
3. If I do not accept either the 15% formula payment amount or the payment amount determined by my loan holder
based on information from this form, the loan rehabilitation process will not proceed and I will be required to repay my
defaulted loans in accordance with the terms of the loan and applicable law.
4. If I do not provide any supporting documentation requested by my loan holder by the deadline specified by my loan
holder, my request for loan rehabilitation will not be considered.
5. If I want to rehabilitate a defaulted Direct Consolidation Loan or Federal Consolidation Loan that was made jointly to
me and my spouse and am requesting an alternative payment amount, my spouse and I must each sign below.
6. If I rehabilitate a loan and default on the same loan again in the future, I may not rehabilitate that loan a second time.
7. I must notify my loan holder immediately if my address changes.
8. If my loan is rehabilitated, my loan will be sold or transferred to a new loan holder or loan servicer. After the sale or
transfer, I will be asked to select a repayment plan. If I do not select a repayment plan, my loans will be placed on the
standard repayment plan, which will likely require me to make a much higher monthly payment amount than the
payment I made to rehabilitate my loan.
9. After my loan is rehabilitated, I may be eligible to repay my loans under an income-driven repayment plan that bases
my payment on my income and family size. An income-driven repayment plan is the type of repayment plan most
likely to have a monthly payment similar to the payment I made to rehabilitate my loans.
10. I can learn more about the eligibility requirements and application process for income-driven repayment plans by
visiting StudentAid.gov/IDR or by asking my loan holder.
I certify that (1) the information that I have provided on this form is true and correct and (2) upon request, I will provide
additional documentation to my loan holder to support the information I have provided in this form.
I authorize the loan holder to which I submit this request (and its agents or contractors) to contact me regarding my request
or my loans, including the repayment of my loans, at any number that I provide on this form or any future number that I
provide for my cellular telephone or other wireless device using automated dialing equipment or artificial or prerecorded
voice or text messages.
Date
Borrower's Signature
Date
Spouse's Signature
Your spouse must sign this form only if you entered your spouse's name and SSN in Section 3.
Page 2 of 5
SECTION 5: INSTRUCTIONS
Basic communication: Include the amount spent on
If you are not completing this form electronically, type or
print using dark ink. Enter dates as month-day-year (mm-dd-
basic communication expenses, such as basic telephone,
yyyy). Use only numbers. Example: March 14, 2017 =
internet, and cable TV.
03-14-2017. Include your name and the account numbers for
your defaulted loans on any documentation that you are
Medical and dental: Include the amount spent on
required to submit with this form. If you need help
necessary medical and dental expenses and procedures not
completing this form, contact your loan holder.
covered by insurance, such as medically necessary
prescription and nonprescription medications, and
Return the completed form to the address shown in
medically necessary nutritional supplements. Do not include
Section 8
any costs relating to medical or dental insurance premium
payments.
MONTHLY INCOME IN SECTION 2 (ITEMS 1-9)
Your loan holder may request supporting documentation
Insurance: Include the amount spent on insurance, such
for any income items.
as necessary renter’s, auto, medical, dental, or life insurance.
Include any amounts paid toward insurance premiums.
Employment income documentation may include a pay
However, if the income amount you listed under Monthly
stub or a letter from the employer stating the income paid to
Income already reflects deductions from your pay for
you by that employer.
insurance premiums, do not list the amount of these
deductions as an Insurance expense. Include homeowner’s
Child support, Social Security benefits, worker’s
insurance under Item 11 (Housing).
compensation, or public assistance documentation may
include copies of benefits checks or a benefits statement, a
Transportation: Include the amount spent on basic
letter from a court, a governmental body, or the individual
transportation expenses such as fuel, car payments, basic
paying child support, specifying the amount of the benefit.
vehicle maintenance, public transportation, tolls, and
parking. Also list the number of vehicles for which you are
Public assistance: Identify the type of public assistance
claiming related transportation expenses.
received (see definition of “public assistance” in Section 6).
Child/dependent care: Include the amount spent on
Other income: Include any other income not covered in
care for children or other dependents in the household and
items 1-6 and identify the source of the income.
other work-related child/dependent care expenses.
If you report that your Total Monthly Income is zero,
Legally required child /spousal support: Include the
explain your means of support in Item 9.
amount spent on legally required child support and spousal
support.
MONTHLY EXPENSES IN SECTION 2 (ITEMS 10-22)
For each monthly expense, provide the amount you
Federal student loan payments: Include the total
usually spend each month. Your loan holder may request
monthly amount you pay on any federal student loans
supporting documentation for any of these items. Do not
except for the defaulted loans you are trying to rehabilitate,
include a single expense in more than one category. If you
unless you are subject to mandatory withholding such as
have no expenses under a category, enter 0 for that
wage garnishment or Treasury offset (e.g., your Social
category.
Security is being garnished). If you are subject to wage
garnishment or Treasury offset include the amount that is
Food: Include the amount spent on food, even if
collected from you each month.
purchased using the Supplemental Nutrition Assistance
Program (SNAP) (food stamps).
Private student loan payments: Include the total
monthly amount you pay on any private student loans.
Housing: Include the amount spent on housing and
Include any type of payment, voluntary or otherwise.
shelter, such as rent, required security deposits, mortgage
payments (including principal, interest, taxes, and
Other expenses: Include the amount spent on any other
homeowner’s insurance), maintenance, and repairs.
necessary expenses not covered in items 10 - 20 and explain
these expenses. These other expenses will be considered
Utilities: Include the amount spent on housing-related
only if the Department of Education determines that they
utility bills, such as gas, electric, fuel oil, water, sewer, trash,
should be considered. If more space is needed to list other
and recycling.
expenses, attach a separate piece of paper and include your
name and Social Security Number at the top.
Page 3 of 5
SECTION 6: DEFINITIONS
The William D. Ford Federal Direct Loan (Direct Loan)
Reasonable and affordable payment amount means a
Program includes Federal Direct Stafford/Ford (Direct
monthly payment determined by the loan holder based
Subsidized) Loans, Federal Direct Unsubsidized Stafford/
either on the 15% formula or on information provided in this
Ford (Direct Unsubsidized) Loans, Federal Direct PLUS
form and supporting documentation. It cannot be a
(Direct PLUS) Loans, and Federal Direct Consolidation (Direct
percentage of your total loan balance or based on
Consolidation) Loans.
information unrelated to your total financial circumstances.
The Federal Family Education Loan (FFEL) Program
The 15% formula means 15% of the amount by which
includes Federal Stafford Loans (both subsidized and
your Adjusted Gross Income exceeds 150% of the poverty
unsubsidized), Federal PLUS Loans, Federal Consolidation
guideline amount that is applicable to your family size and
Loans, and Federal Supplemental Loans for Students (SLS).
state, divided by 12. Your minimum payment may not be
Rehabilitation of your defaulted loan occurs only after
less than $5.00.
you have made 9 voluntary, reasonable and affordable
monthly payments within 20 days of the due date during 10
The loan holder of a defaulted Direct Loan Program
consecutive months and, for FFEL loans held by a guaranty
loan is the Department. The loan holder of a defaulted FFEL
agency, when the loan has been sold to an eligible lender or
Program loan may be a guaranty agency or the Department.
assigned to the U.S. Department of Education (the
Public assistance means payments you receive under a
Department). When you rehabilitate your loans, you will
federal or state program. These assistance programs include,
regain all the benefits of the Direct Loan Program or FFEL
but are not limited to, Temporary Assistance for Needy
Program, including eligibility for deferments or forbearances
Families (TANF), Supplemental Security Income (SSI), Food
and for a repayment plan with a monthly payment amount
Stamps/Supplemental Nutritional Assistance Program
based on your income. You will also regain eligibility to
(SNAP), or state general public assistance.
receive additional federal student aid, including additional
federal student loans. After a defaulted loan is rehabilitated,
your loan holder will instruct any consumer reporting
agency (credit bureau) to which the default was reported to
remove the default from your credit history.
SECTION 7: LOAN REHABILITATION AGREEMENT
To rehabilitate your loan, you must accept either the
To accept the loan rehabilitation agreement, you must
monthly rehabilitation payment amount determined using
sign the agreement and return it to your loan holder.
the 15% formula, or the payment amount determined based
During the loan rehabilitation period, the loan holder
on the monthly income, monthly expenses, and family size
will limit contact with you on the loan being rehabilitated to
information that you provide on this form and on any
collection activities that are required by law or regulation,
requested supporting documentation.
and to communication that supports the rehabilitation.
Your loan holder will provide you with a written loan
If you do not accept either monthly payment amount,
rehabilitation agreement confirming your monthly
your rehabilitation request will not be considered any
rehabilitation payment amount.
further.
SECTION 8: WHERE TO SEND THE COMPLETED FORM
Return the completed form and any documentation to:
If you need help completing this form, call:
(If no address is shown, return to your loan holder.)
(If no telephone number is shown, call your loan holder.)
Page 4 of 5
SECTION 9: IMPORTANT NOTICES
Privacy Act Notice. The Privacy Act of 1974 (5 U.S.C.
To assist program administrators with tracking
552a) requires that the following notice be provided to you:
refunds and cancellations, disclosures may be made to
guaranty agencies, to financial and educational institutions,
The authorities for collecting the requested
or to federal or state agencies. To provide a standardized
information from and about you are §421 et seq. and §451
method for educational institutions to efficiently submit
et seq. of the Higher Education Act of 1965, as amended (20
student enrollment statuses, disclosures may be made to
U.S.C. 1071 et seq. and 20 U.S.C. 1087a et seq.) and the
guaranty agencies or to financial and educational
authorities for collecting and using your Social Security
institutions. To counsel you in repayment efforts, disclosures
Number (SSN) are §§428B(f) and 484(a)(4) of the HEA (20
may be made to guaranty agencies, to financial and
U.S.C. 1078-2(f) and 1091(a)(4)) and 31 U.S.C. 7701(b).
educational institutions, or to federal, state, or local
Participating in the William D. Ford Federal Direct Loan
agencies.
(Direct Loan) Program or the Federal Family Education Loan
(FFEL) Program and giving us your SSN are voluntary, but
In the event of litigation, we may send records to the
you must provide the requested information, including your
Department of Justice, a court, adjudicative body, counsel,
SSN, to participate.
party, or witness if the disclosure is relevant and necessary
to the litigation. If this information, either alone or with
The principal purposes for collecting the
other information, indicates a potential violation of law, we
information on this form, including your SSN, are to verify
may send it to the appropriate authority for action. We may
your identity, to determine your eligibility to receive a loan
send information to members of Congress if you ask them
or a benefit on a loan (such as a deferment, forbearance,
to help you with federal student aid questions. In
discharge, or forgiveness) under the Direct Loan and/or
circumstances involving employment complaints,
FFEL Programs, to permit the servicing of your loans, and, if
grievances, or disciplinary actions, we may disclose relevant
it becomes necessary, to locate you and to collect and
records to adjudicate or investigate the issues. If provided
report on your loans if your loans become delinquent or
for by a collective bargaining agreement, we may disclose
default. We also use your SSN as an account identifier and to
records to a labor organization recognized under 5 U.S.C.
permit you to access your account information
Chapter 71. Disclosures may be made to our contractors for
electronically.
the purpose of performing any programmatic function that
The information in your file may be disclosed, on a
requires disclosure of records. Before making any such
case-by-case basis or under a computer matching program,
disclosure, we will require the contractor to maintain Privacy
to third parties as authorized under routine uses in the
Act safeguards. Disclosures may also be made to qualified
appropriate systems of records notices. The routine uses of
researchers under Privacy Act safeguards.
this information include, but are not limited to, its disclosure
Paperwork Reduction Notice. According to the
to federal, state, or local agencies, to private parties such as
Paperwork Reduction Act of 1995, no persons are required
relatives, present and former employers, business and
to respond to a collection of information unless such
personal associates, to consumer reporting agencies, to
collection displays a valid OMB control number. The valid
financial and educational institutions, and to guaranty
OMB control number for this information collection is
agencies in order to verify your identity, to determine your
1845-0120. Public reporting burden for this collection of
eligibility to receive a loan or a benefit on a loan, to permit
information is estimated to average 60 minutes per
the servicing or collection of your loans, to enforce the
response, including time for reviewing instructions,
terms of the loans, to investigate possible fraud and to verify
searching existing data sources, gathering and maintaining
compliance with federal student financial aid program
the data needed, and completing and reviewing the
regulations, or to locate you if you become delinquent in
collection of information. The obligation to respond to this
your loan payments or if you default. To provide default rate
collection is required to obtain a benefit in accordance with
calculations, disclosures may be made to guaranty agencies,
34 CFR 682.405 or 685.211. If you have questions regarding
to financial and educational institutions, or to state
the status of your individual submission of this form, contact
agencies. To provide financial aid history information,
your loan holder (see Section 8).
disclosures may be made to educational institutions.
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