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How long do I have before my student loan goes into default?

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In a Nutshell

When you miss your student loan payments, you risk defaulting on your loan. Different lenders have different timeframes for when they consider a loan to be “in default,” so it’s important to know the terms of your loan and understand the timeframe for default. This article will explain how long it takes for federal and private student loans to go into default if you miss a monthly payment.

Written by the Upsolve TeamLegally reviewed by Attorney Andrea Wimmer
Updated July 30, 2021

According to CNBC, about 43 million (1 in 8) Americans have student loan debt. Many student loan borrowers have trouble making their monthly payments. A late student loan payment could cause the loan to go into default, which could negatively affect a borrower’s credit score. This article will explain how long it takes for federal and private student loans to go into default if you miss a monthly payment. Remember that you have options to manage your student loan debt.

What happens if I default on my student loan?

What happens after you default on your student loan depends on the type of loan: federal or private. Federal student loans are made by the federal government and their terms and conditions are set by federal law. Private student loans are loans made directly from banks or other private lenders. The terms and conditions of private loans are set by the lender. 

If you don't make your student loan payment by the due date, your loan becomes past due or delinquent. You’ll also be charged a late fee. Your loan is considered delinquent until you pay the past-due amount or you make other arrangements. Private lenders treat the default and delinquency of private student loans differently than the federal government. If you have a private student loan, you should know that it will typically go into default as soon as you miss a payment. What constitutes a default will be defined in your student loan agreement. 

Federal Loans

There are four types of Direct Loans currently available from the U.S. Department of Education. While other federal loan programs like the Federal Family Education Loans (FFEL) and Perkins Loans are no longer available, borrowers of these loans are still making payments to repay these loans. 

If you default on a federal student loan, the loan will be "accelerated." This means that the entire amount of the loan is due immediately. As a result, you will no longer qualify for deferment, forbearance, or a repayment plan, and you won’t be eligible to receive any additional federal student aid. The default will be also reported to the credit bureaus and affect your credit score. 

If you default on your student loan, the lender can also garnish up to 15% of your wages without going to court. This is different from private student loan lenders. They are required to file a lawsuit and obtain a judgment before they can garnish your wages. The federal government can also keep your tax refunds and other federal benefits, including your Social Security benefits, if you default on a federal student loan. 

If you default on your student loans, your school can also withhold your academic transcript. Since an academic transcript is school property, the school will decide whether to release your transcript to you, not the U.S. Department of Education or your loan servicer. This may interfere with your attempts to find a job, but typically a school will not withhold your transcript unless it is your student loan lender.

After defaulting, your loan may be turned over to a collection agency. The U.S. Department of Education contracts with several collection agencies to collect defaulted loans. If your lender or servicer places your loan with a collection agency, you will be responsible for any costs incurred by the collection agency to get paid. These costs amount to 17.92% of your loan amount if your loan is held by the Department of Education. 

Although federal student loan servicers don’t usually file lawsuits, they can. In practice, this isn’t as common as private student loan lenders filing lawsuits. 

Private Loans

If you default on a private student loan, the results are very similar to defaulting on federal student loans. One difference is that a private lender or servicer cannot take your tax refunds or federal benefits to satisfy student loan debt. Like federal loans, when you default on a private student loan your loan is "accelerated." This means that the entire amount of the loan becomes due. The default will appear on your credit report and affect your credit score, which can hurt your future attempts to get credit.

If you default on your loan and the loan servicer’s collection efforts fail, your loan will be turned over to a private collection agency. The timeline for this will vary and depends on your private loan servicer. You may be sued if the collection agency can’t collect any portion of the debt. Again, since this involves a private lender or servicer, rather than the Department of Education, these timeframes may vary by the servicer. Keep in mind that private loan lenders use going to court and filing a lawsuit as their main method for collecting defaulted loans.

Unlike federal student loan lenders, parties trying to collect private student loans must file a lawsuit. They will be awarded a judgment if they win this lawsuit. As judgment-creditors, they can now garnish your wages or seize money from your bank account.

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How long does it take to default on my federal loan?

Direct Loans and Federal Family Education Loan (FFEL) Program loans default when payments are 270 days late. Perkins Loans can default as soon as one day after the due date. It depends on the lender or servicer. 

Once your federal student loan goes into default, you lose access deferment, forbearance, and other financial aid. But this isn’t the end of the road. Repayment options are available. You may be able to get a direct consolidation loan for your federal loans at no cost. This new loan has a fixed interest rate for the life of the loan. In certain situations, you may be eligible for student loan forgiveness of some or all of your loan balance.

How long does it take to default on my private loan?

Private lenders, not federal law, determine the terms and conditions of your private student loan. This means that the important provisions for repaying your loan can vary by lender. If you have two student loans with two different lenders, a default may be defined differently by each loan agreement. You need to look closely at your loan agreement to make sure that you understand when you are defaulting on your student loan.

There is no specific amount of time defined by federal law for default on private student loans. The timeframe is often less than 270 days. Some lenders may allow up to 120 days, but it’s often much sooner. Private lenders aren't required by law to help you get out of default. Some private lenders have loan rehabilitation programs that may help you restore your student loan to some status other than default. Contact your private loan servicer to learn more about these programs. 

If you are suffering from financial hardship because you have several monthly payments, you can consider consolidating your student loans. This combines all your loans into a single loan, which results in one repayment plan and monthly payment. Depending on your credit history and credit score, you may also be able to refinance your student loans. You may need a co-signer, but this may help you get a more manageable payment plan and a lower interest rate. 

Let’s Summarize…

Student loan debt can be overwhelming. It’s easy to fall behind on your monthly payments and become delinquent. When you miss your student loan payments, you risk defaulting on your loan. Different lenders consider a loan to be “in default” on different timelines. Most federal loans go into default after payment is past due for 270 days. Private loans go into default much faster (at most 120 days, but usually much sooner). It’s important to know the terms of your loan and understand the time frame for default. A default may have devastating effects on your credit and even your discretionary income.

Written By:

The Upsolve Team

Upsolve is fortunate to have a remarkable team of bankruptcy attorneys, as well as finance and consumer rights professionals, as contributing writers to help us keep our content up to date, informative, and helpful to everyone.

Attorney Andrea Wimmer


Andrea practiced exclusively as a bankruptcy attorney in consumer Chapter 7 and Chapter 13 cases for more than 10 years before joining Upsolve, first as a contributing writer and editor and ultimately joining the team as Managing Editor. While in private practice, Andrea handled... read more about Attorney Andrea Wimmer

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