Satisfactory Repayment Arrangement [Education] Law and Legal Definition

According to 34 CFR 685.102 (b) [Title 34 – Education; Subtitle B -- Regulations of the Offices of the Department of Education; Chapter VI -- Office of Postsecondary Education, Department of Education; Part 685 -- William D. Ford Federal Direct Loan Program; Subpart A -- Purpose and Scope], the term satisfactory repayment arrangement means:

“(1) For the purpose of regaining eligibility under section 428F (b) of the HEA, the making of six consecutive, voluntary, on-time, full monthly payments on a defaulted loan. A borrower may only obtain the benefit of this paragraph with respect to renewed eligibility once.

(2) For the purpose of consolidating a defaulted loan under 34 CFR 685.220(d) (1) (ii) (C), the making of three consecutive, voluntary, on-time, full monthly payments on a defaulted loan.

(3) The required monthly payment amount may not be more than is reasonable and affordable based on the borrower's total financial circumstances. "On-time" means a payment made within 15 days of the scheduled due date, and voluntary payments are those payments made directly by the borrower and do not include payments obtained by Federal offset, garnishment, or income or asset execution.”