Reinstatement of Title IV Eligibility

• the borrower makes six consecutive, voluntary, on-time, full monthly payments on the defaulted loan and continues the monthly payments to maintain eligibility; this is not automatic - the borrower must first request the reinstatement. A Reinstatement can only be granted once to a borrower. If it is granted and the borrower misses one monthly payment the borrower loses eligibility.
• the borrower's loan is rehabilitated by making 9 voluntary, full payments during a period of 10 consecutive months. The payments must be made within 20 days of the due date. A lump sum prepayment of future installments cannot be used to satisfy the consecutive months payment requirement. A lender must repurchase the loan for a rehabilitation to be complete.
• the defaulted loan is paid in full through consolidation; or
• the borrower pays the defaulted loan in full.

The National Student Loan Data System (NSLDS) provides the status of a student’s loans. When NSLDS has information that shows the loan has been paid in full or paid in full by consolidation, a school does not need to contact ISAC for a reinstatement letter. If a school needs verification that a student has met the requirements for reinstatement of Title IV eligibility, the school should contact School Services at schoolservices@isac.org to obtain a reinstatement letter.

Additional sources of information on reinstatement of eligibility for Title IV and ISAC gift assistance programs include:

• Federal Regulations – 34 CFR, Section 682.200(a)(5); and
• ISAC Rules – Section 2700.40(a).

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