The Voluntary Flexible Agreement (VFA) was created by the United States Congress in 1998 during a reauthorization of the Higher Education Act of 1965.
The VFA objective is experimentation for the purpose of finding the best practices, collecting long-term data, and sharing results in order to determine what benefits schools, students, the federal government, and the American taxpayer.
Before the first VFA, the federal student loan program existed for nearly 40 years without any definitive data on what prevents delinquency and default.
Best practice found that the best time to intervene is during the six-month grace period after a student graduates, withdraws, or drops below half-time attendance in school.
[2] Through the VFA proposal, borrowers who previously defaulted on their loans are able to enter a rehabilitation process and clean up their credit reports.
[3] In the loan rehabilitation process, borrowers can reverse their delinquent status by making nine voluntary, on-time, consecutive payments.