Federal Student Loan Delinquency and Default

Delinquency on a federal student loan occurs when a borrower fails to make a payment on their loan by the due date. If a borrower misses a ...

Delinquency on a federal student loan occurs when a borrower fails to make a payment on their loan by the due date. If a borrower misses a payment or makes a partial payment, they will be considered delinquent. If the borrower continues to miss payments, the delinquency will continue and may eventually lead to default.

Default on a federal student loan occurs when a borrower fails to make their required payments for an extended period of time, typically 270 days for Direct Loans and FFEL Program loans. Default can have serious consequences for the borrower, including:

• Damage to credit score: Defaulting on a loan can have a significant negative impact on a borrower's credit score, which can make it more difficult and more expensive to borrow money in the future.
• Garnishment of wages: The government may garnish (take a portion of) a borrower's wages to pay off their defaulted loan.
• Loss of tax refunds: The government may also seize a borrower's tax refunds to pay off a defaulted loan.

Ineligibility for future federal student aid: A borrower who defaults on a federal student loan may become ineligible for future federal student aid, including grants, loans, and work-study programs.

It's important for borrowers to try to avoid delinquency and default on their federal student loans. If you are having trouble making your monthly payments, there are options available to help you avoid falling behind on your loans. These include loan forbearance, which allows you to temporarily postpone or reduce your payments, and loan rehabilitation, which allows you to get back on track with your payments and become current on your loans.

If you are having difficulty making your monthly student loan payments, it's important to contact your loan servicer as soon as possible to discuss your options. They may be able to work with you to find a solution that fits your individual needs and circumstances.