This status indicates that you've defaulted on a federal student loan, and it was paid through insurance and closed. You still owe though.
There is a one-time opportunity to rehabilitate your defaulted loan and get the default removed from your credit history. You have to make arrangements with the guarantee agency to repay the debt. If you make 9 out of 10 consecutive on-time full reasonable and affordable monthly payments, as defined by the agreement, the loan will be rehabilitated and the default removed from your credit reports.
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