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My Plan

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Cancel Your Student Loan
You can get out of default if you qualify to have your loan canceled (discharged). This is the best option, because when you cancel the loan, you are no longer obligated to repay it. However, there are limited ways to qualify for loan cancelation, so this option won't work for many people.
To learn about the different ways to cancel student loans, see the articles in Nolo's Student Loan Debt area.
Get a Consolidation Loan
You can get out of default by getting a consolidation loan with a repayment plan matched to your income
With a consolidation loan, you combine one or more of your federal student loans into a single loan with one monthly payment. To learn more, see Student Loan Consolidation.
Once you get a Direct Consolidation Loan, you will immediately be taken out of default status. You will stay out of default as long as you keep making payments. Loan consolidation is usually a faster way to get out of default than a reasonable and affordable payment plan (see below), so it often makes sense to try this first.
Get a Reasonable & Affordable Payment Plan
Another way to get out of default is to set up a “reasonable and affordable payment plan” with your loan holder. Borrowers in default have a statutory right to such a payment plan, based on financial circumstances. Be careful in negotiating a plan. By the time you are in default, your loan may be held or serviced by a state guarantee agency or a collection agency under contract with the Department of Education. Some loan servicers, especially collection agencies, may try to make you agree to payments higher than you can afford.
Eligibility to Apply for New Loans
If you make six consecutive and timely payments (within 15 days of when due) under a reasonable and affordable payment plan, you become eligible to apply for new federal student loans or grants if you want to return to

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