There’s not much to say about this option, because it won’t be realistic for most borrowers whose loans have gone into default. One way to handle the situation is to pay off the full amount. For federal student loans, you have three ways to get out of a default, which are analyzed in the following sections:Īfter defaulting on a federal student loan, the entire remaining balance is due immediately. Recovery options are different depending on whether you have federal or private student loans. How to recover from federal student loan default With private student loans, you’ll need to review your loan contract or contact the lender to find out how long it takes for the loan to go into default. The exception is loans in the Federal Perkins Loans Program, which can go into default as soon as you miss a payment. Once they reach 270 days past-due, then they go into default. Most federal student loans go into a delinquent status after you miss a payment.

With delinquent loans, there are options available to prevent them from going into default, including changing your repayment plan or applying for deferment or forbearance. If you’re past-due on federal loans, it’s crucial that you check whether they’re in a delinquent or default status. The amount of time depends on the type of loan you have. Loans typically need to be past-due by a specific amount of time before they go into default. What is a student loan default?Ī student loan default occurs when you fail to make your loan payments. The good news is that you can work your way out of a student loan default, but only if you take action ASAP. If you default on federal student loans, the loan servicer can also garnish your wages and withhold federal payments you’re owed, such as tax refunds. This can have major repercussions, including late fees, more interest accumulating on your loan, and a drop of 60 points or more on your credit score.

Student loan defaults by major