Student Loan Delinquency and Default

Loans must be repaid.

Student Loan Delinquency and Default

If you’ve missed a payment or are having trouble making payments, immediately contact and discuss options with the organization that handles billing and other services for your loan to avoid defaulting on your loan.

If you don’t know who your loan servicer is, call the Federal Student Aid Information Center (FSAIC) at 1-800-433-3243.

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Automatic Administrative Forbearance and Temporary 0% Interest as a Result of the COVID-19 National Emergency

To provide relief to student loan borrowers during the COVID-19 national emergency, federal student loan borrowers are automatically being placed in an administrative forbearance, which allows you to temporarily stop making your monthly loan payments. In addition, interest is being temporarily set at 0% on federal student loans. This 0% interest and suspension of payments will last from March 13, 2020, through Sept. 30, 2020, but you can still make payments if you choose.

Have questions? Find out what loans qualify, and get additional information about the 0% interest period, administrative forbearance, and other student loan flexibilities due to the COVID-19 national emergency.

Understanding Delinquency

It's important to pay the amount shown on your bill—and to pay by the due date.

The first day after you miss a student loan payment, your loan becomes past due, or delinquent. Your loan account remains delinquent until you repay the past due amount or make other arrangements, such as deferment or forbearance, or changing repayment plans.

If you are delinquent on your student loan payment for 90 days or more, your loan servicer will report the delinquency to the three major national credit bureaus. If you continue to be delinquent, your loan can risk going into default. Don’t ignore your student loan payments—defaulting on your loan can have serious consequences. Learn more on how to avoid default.

Note: Credit bureaus may be called "consumer reporting agencies" on the promissory note you signed before receiving your loan.

If you have a poor credit rating, it can be difficult for you to obtain

  • credit cards,
  • home or car loans, or
  • other forms of consumer credit.

Note: You may also be charged a higher interest rate than someone with a good credit rating.

You also may have trouble

  • signing up for utilities,
  • getting homeowner's insurance,
  • getting a cell phone plan, or
  • getting approval to rent an apartment (credit checks usually are required for renters).

Understanding Default

If your loan continues to be delinquent, the loan may go into default. The point when a loan is considered to be in default varies depending on the type of loan you received.

For a loan made under the William D. Ford Federal Direct Loan Program or the Federal Family Education Loan Program, you’re considered to be in default if you don’t make your scheduled student loan payments for at least 270 days.

For a loan made under the Federal Perkins Loan Program, the holder of the loan may declare the loan to be in default if you don’t make your scheduled payment by the due date. Find out where to go for information about your Perkins Loan.

If you defaulted on any of your federal student loans, contact the organization that notified you of the default as soon as possible so you can explain your situation fully and discuss your options. If you make repayment arrangements soon enough after your loan has gone into default, you may be able to resolve the default quickly. Learn more about getting out of default.


Consequences of Default

The consequences of defaulting can not only impact your ability to borrow but can impact your finances as well. Consequences include the following:

  • The entire unpaid balance of your loan and any interest you owe becomes immediately due (this is called "acceleration").
  • You can no longer receive deferment or forbearance, and you lose eligibility for other benefits, such as the ability to choose a repayment plan.
  • You lose eligibility for additional federal student aid.
  • The default is reported to credit bureaus, damaging your credit rating and affecting your ability to buy a car or house or to get a credit card.
  • It may take years to reestablish a good credit record.
  • You may not be able to purchase or sell assets such as real estate.
  • Your tax refunds and federal benefit payments may be withheld and applied toward repayment of your defaulted loan (this is called “Treasury offset”).
  • Your wages may be garnished. This means your employer may be required to withhold a portion of your pay and send it to your loan holder to repay your defaulted loan.
  • Your loan holder can take you to court.
  • You may be charged court costs, collection fees, attorney’s fees, and other costs associated with the collection process.
  • Your school may withhold your academic transcript until your defaulted student loan is satisfied. The academic transcript is the property of the school, and it is the school's decision—not the U.S. Department of Education’s or your loan holder’s—whether to release the transcript to you.

If You Are Delinquent or In Default, Your Loan Servicer Can Help

If you're having trouble making payments or are concerned about the status of your federal student loan(s), you have options available to you.

Contact your loan servicer to discuss how to get back on track with payments. There are several affordable repayment options that you may be able to take advantage of to continue making loan payments even when times are tough.


My Loan Was Mistakenly Put in Default

If you believe your loan has been placed in default by mistake, here’s what you can do to correct the error.

Situation Solution

I’m in school at least half-time and should have received an in-school deferment.

  • Contact your school’s registrar to get a record of all your dates of at least half-time attendance.
  • Contact each school you have attended since you received your loan, so your documentation is complete.
  • Ask your loan servicer for the last date of attendance they have on file for you.
    • If they have the incorrect date for your last date of attendance, provide them with a copy of your documentation showing the correct date.

I was approved for deferment or forbearance.

  • Ask your loan servicer to confirm the start and end dates of any deferments and forbearances that were applied to your loan account.
    • If the loan servicer has incorrect information, provide documentation with the correct information.

I’ve made my payments on time.

  • Ask your loan servicer for a statement that shows all the payments made on your student loan account.
    • If payments you made are not listed, provide proof of payment to your loan servicer and request that the information in your account be corrected.

Defaulted Federal Loan Servicer

MAXIMUS Federal Services, Inc., is the loan servicer for defaulted federal student loans over 360 days delinquent.

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