Down Payment When Trying To Rehab A Loan

They can "ask" for a downpayment but the Higher Education Act does not require a downpayment to qualify for rehab. Payments minimum payment on a rehab is $50, so 2% is pretty close. If they push for a downpayment, just tell them you will file a complaint with the Student Loan Ombudsman.

Well today I called the collection agency back and told them I was not going to put down a down payment but I still wanted to rehab my loan. The lady went and told me I had to put down a down payment or I couldn't rehab it. I told her I would call the ombudsman and complain. She told me thats fine. I hung up on her and proceeded to call there. The guy who picked up the phone told me that they can ask for a down payment and told me maybe I should think of consolidating. Now I don't know what to do except to consolidate.

Nowhere in the Higher Education Act does it state that a downpayment is a requirement for rehab. They can ask all they want but it is not a requirement. Call the ombudsman again.