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What happens if I default on a federal student loan?

If your loan holder is unable to obtain payment from you for 270 days, they will take steps to place the loan in default and attempt to collect on the loan.

The CFPB’s Debt Collection Rule clarifying certain provisions of the Fair Debt Collection Practices Act (FDCPA) became effective on November 30, 2021.

Default is the failure to repay a loan according to the terms agreed to in the promissory note. For most federal student loans, you will default if you have not made a payment in more than 270 days.

If you haven’t made a payment on your federal student loan for 270 days (nine months), and you have not made arrangements with your lender or servicer that do not obligate you to make those payments (like deferment or forbearance), you are probably in default.

During the months in which you have failed to make payments on your federal student loans, your servicer must exercise "due diligence" in attempting to collect the loan - your servicer must make repeated efforts to locate and contact you about repayment.

If you have not received a letter from your servicer and you believe you may be in default, contact your servicer immediately. Ask about repayment options and find out if it is possible for you to avoid default.

Once your federal student loan goes into default, you could face a number of consequences:

  • Your wages may be garnished without a court order
  • You can lose out on your tax refund or Social Security check (funds would be applied toward your defaulted student loan)
  • Credit reporting agencies will be notified, and your credit score may suffer

You may not receive any additional federal student aid if you are in default on any federal student loan until you have taken steps to bring your federal student loan out of default. The Department of Education’s Going Back to School guide has more information on this topic.

If you are behind on your federal student loan payments and being contacted by a debt collector, you may be able to arrange repayment options to get out of default.