10 Consequences of Delinquency and Default on Your Student Loans

If you miss a payment or are late with a payment, your loan becomes delinquent and you may face late fees. If you’re having trouble making payments, contact your lender or loan servicer immediately. Ask about alternatives you may have for changing the date your payments are due, switching to a different payment plan, or being granted deferment or forbearance Links to an external site.. Click here for helpful information from the federal Consumer Financial Protection Bureau Links to an external site. for students falling behind on their loan payments.

If you fail to make payments for 270 days in a row, your federal student loan goes into default Links to an external site.. Defaulting on a federal student loan has serious consequences that can negatively impact your financial future. If you go into default, you:

  1. Are required to repay the entire unpaid amount of your loan immediately
  2. May be sued by the federal government, which may take all or part of your federal and state tax refunds
  3. May have your wages garnished by the federal government, so that your employer is required to send part of your salary to pay off your loans
  4. May be required to pay a reasonable amount of collection costs and fees
  5. Will be reported to credit bureaus, which will hurt your credit score
  6. May be denied a professional license
  7. Will lose your eligibility for federal student aid as well as help under most other federal benefit programs
  8. Will lose your eligibility for loan deferments
  9. May have your Social Security benefits garnished
  10. May be harassed by collection agencies

Never ignore notices from your loan servicer or lender. If you experience any problems repaying your student loan, don’t wait until you’ve missed a payment to take action. Contact your lender or servicer immediately to discuss your repayment options.

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