Loan default


Default is a serious consequence for not repaying your loans. It will occur if you fail to make a payment for 270 days. The school, lender, or agency that holds your loan may all take action to recover the money.

Not paying back your student loans can have serious consequences including:

  • The lender can require that you repay the entire amount immediately, including all interest, collections, and late payment charges.
  • The lender can sue you and can ask the federal government for help in collecting from you.
  • The lender can garnish your wages.
  • The Internal Revenue Service may withhold your income tax refund and apply it toward your loan repayment.
  • You cannot get any additional federal student aid until you make satisfactory arrangements to repay your loan.
  • The lender may notify credit bureaus of your default. This may affect your credit rating, which will make it difficult to obtain credit cards, car and/or home loans in the future.

There are several options for repaying your loans if you suffer a financial hardship or other circumstances. In many cases, default can be avoided by submitting a request for a deferment, forbearance, discharge, or cancellation and by providing the required documentation. 

You can call a live counselor if you are already in default to help you resolve the default and get back in good standing.

What happens if I default on a loan?

If I default on a student loan, how can I fix it?

Can I get federal financial aid if I am in default on a student loan?