...did anyone ever figure out if one can or cannot rehab a consolidated loan? There was much discussion on this and I've read through the HEA and still don't know if this can be done. My fiance has several negs on his reports from defaulted student loans that have since been consolidated. At the time we didn't know about rehabbing loans and of course no CA was going to tell us about it. This could really screw us in a year or two when we attempt to buy a house, so if anyone has suggestions or knows what the consensus is on rehabbing consolidated loans, I would appreciate your input! Thanks.
After a Perkins CA said I could, I spoke to the Dept of Ed they said I couldn't. However, the way I read the HEA under FFEL loans, rehab is listed under default reduction programs which sounds to me like you can take advantage of rehab even if you are not in default. Now in the Perkins section is specifically refers to loans in default being rehabbed, so for a Perkins loan it sounds like the loan has to be in default. All this being said, this doesn't mean you can't talk someone into doing the rehab anyway, especially if you don't spell out the fine points of the law for them but what they are required to do as you interpret the HEA. I think they all want you to consolidate so they can get their money as fast as they can without them doing much and certainly not worrying about your credit, and that is why the rehab is kind of confusing sometimes. Its your job to do what is best for you. Good luck.
