If you don’t make your student loan payment or you make your payment late, your loan may eventually go into default. If you default on your student loan, that status will be reported to national credit reporting agencies. This reporting may damage your credit rating and future borrowing ability. Also, the government can collect on your loans by taking funds from your wages, tax refunds, and other government payments.

Understanding Delinquency
It's important to pay the amount shown on your bill—and to pay by the due date.

The first day after you miss a student loan payment, your loan becomes past due, or delinquent. Your loan account remains delinquent until you repay the past due amount or make other arrangements, such as deferment or forbearance, or changing repayment plans.

If you are delinquent on your student loan payment for 90 days or more, your loan servicer will report the delinquency to the three major national credit bureaus. If you continue to be delinquent, your loan can risk going into default. Don’t ignore your student loan payments—defaulting on your loan can have serious consequences. Learn more on how to avoid default.

Note: Credit bureaus may be called "consumer reporting agencies" on the promissory note you signed before receiving your loan.

If you have a poor credit rating, it can be difficult for you to obtain

credit cards,

home or car loans, or

other forms of consumer credit.

Note: You may also be charged a higher interest rate than someone with a good credit rating.

You also may have trouble

signing up for utilities,

getting homeowner's insurance,

getting a cell phone plan, or

getting approval to rent an apartment (credit checks usually are required for renters).

Understanding Default
If your loan continues to be delinquent, the loan may go into default. The point when a loan is considered to be in default varies depending on the type of loan you received.

For a loan made under the William D. Ford Federal Direct Loan Program or the Federal Family Education Loan Program, you’re considered to be in default if you don’t make your scheduled student loan payments for at least 270 days.

For a loan made under the Federal Perkins Loan Program, the holder of the loan may declare the loan to be in default if you don’t make your scheduled payment by the due date. Find out where to go for information about your Perkins Loan.

If you defaulted on any of your federal student loans, contact the organization that notified you of the default as soon as possible so you can explain your situation fully and discuss your options. If you make repayment arrangements soon enough after your loan has gone into default, you may be able to resolve the default quickly. Learn more about getting out of default.

Consequences of Default
The consequences of defaulting can not only impact your ability to borrow but can impact your finances as well. Consequences include the following:

The entire unpaid balance of your loan and any interest you owe becomes immediately due (this is called "acceleration").

You can no longer receive deferment or forbearance, and you lose eligibility for other benefits, such as the ability to choose a repayment plan.

You lose eligibility for additional federal student aid.

The default is reported to credit bureaus, damaging your credit rating and affecting your ability to buy a car or house or to get a credit card.

It may take years to reestablish a good credit record.

You may not be able to purchase or sell assets such as real estate.

Your tax refunds and federal benefit payments may be withheld and applied toward repayment of your defaulted loan (this is called “Treasury offset”).

Your wages may be garnished. This means your employer may be required to withhold a portion of your pay and send it to your loan holder to repay your defaulted loan.

Your loan holder can take you to court.

You may be charged court costs, collection fees, attorney’s fees, and other costs associated with the collection process.

If your school withholds your official transcript, upon your request the school must provide you with an unofficial transcript that might be accepted by another institution. If you are struggling to get your transcript from your school, submit a complaint to the Consumer Financial Protection Bureau.

If You Are Delinquent or In Default, Your Loan Servicer Can Help

If you're having trouble making payments or are concerned about the status of your federal student loan(s), you have options available to you.

Contact your loan servicer to discuss how to get back on track with payments. There are several affordable repayment options that you may be able to take advantage of to continue making loan payments even when times are tough.