Default Rehabilitation

MI-LOAN Program rehabilitation:

The consequences of default are far reaching and affect a borrower's and cosigner’s lives for many years to come.   Payment to the Michigan Department of Treasury Collections Division is required, but does not remove the default.  MI-LOAN Program student loans remain in default until rehabilitated or paid in full.

To rehabilitate a MI-LOAN Program loan, payments must be equal to or greater than the amount determined to be required for repayment during default.  A lump sum payment of future installments cannot be used to satisfy more than two monthly payments. After making nine full; on-time payments within a consecutive ten-month period, contact the MI-LOAN Program at 888‑643-7521.

Military personnel:
If the loan default occurred while the borrower or cosigner was on active military duty or within 12 months thereafter, contact the MI-LOAN Program to discuss qualification requirements.

Rehabilitation process:
Once the loan is determined to be eligible, a rehabilitation packet will be provided to the borrower or cosigner with instructions for completion. 

Upon completion of the rehabilitation:
The MI-LOAN Program will authorize removal of the loan(s) from default status and transfer of the loan(s) from the State of Michigan Department of Treasury Collections Division back to the loan servicer.

Repayment after rehabilitation:
After the rehabilitation is finalized, a new 15-year repayment schedule and monthly billing statements will be provided to the borrower and cosigners, if applicable.

Rehabilitation is a one-time opportunity.  If the loan becomes 120 days delinquent again and is returned to the Collections Division, the loan cannot be rehabilitated a second time.

All borrower options and benefits are subject to change.