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Office of Financial Aid and Scholarships

Division of Student Life and Enrollment

Defaulting on a loan means that a student has failed to meet the agreed on terms of his/her loan promissory note, and now faces legal actions by the lender. With a little planning defaulting can and should be avoided.

When is a loan placed in default?

In general, a federal student loan is placed in default when a borrower doesn't make a payment and has been unreachable or unresponsive to requests for payment for 270-360 days after the first missed payment.

What is a Delinquency Period?

After a borrower misses a payment his/her loan enters a delinquency period. During the delinquency period, the lender must make repeated efforts to locate and contact the borrower about repayment. If the lender is unsuccessful, steps will be taken to place the loan in default. 

Borrowers should avoid default at all costs!

Unlike other consumer loans, student loans usually can't be discharged through bankruptcy and will likely stay with borrowers for the rest of their lives.

A borrower with a defaulted loan faces these consequences:

  • Payment of entire loan balance (principal and interest)
  • becomes due immediately
  • Garnished wages and federal and/or state tax refunds
  • Withheld Social Security retirement benefits and disability
  • benefits
  • Additional charges, late fees, and collection costs
  • Lawsuits
  • Ineligibility for additional student aid
  • Damaged credit rating and lower credit score (which could
  • prevent obtaining a mortgage, buying a car, or borrowing
  • other consumer loans in the future)
  • Loss of eligibility for loan deferments (such as for in-school,
  • unemployment, etc.)


How do I avoid defaulting on my student loan?

Borrowers who have difficulty making loan payments should contact the lender as soon as possible to see which options are available to them. Borrowers who try to avoid their lender could lose out on some readily available repayment benefits and options.

The best way to avoid defaulting on your loan is to make payments on time!

Discover steps you can take to repay your federal student loan successfully and avoid going into default.


What if my loan is already in default?

Don’t get discouraged! If you are in default on your federal student loan, there are options for getting out of default, including loan repayment, loan rehabilitation, and loan consolidation. Find out more about how to get your loan out of default

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