Delinquency and Default
About delinquency and default
Falling behind on your student loan payments can have devastating consequences.
- When you borrowed money to attend school, you signed the Master Promissory Note (MPN) legally obligating you to repay your loans.
- Making your monthly student loan payments on time can help you establish good credit.
- Failure to pay all or part of your monthly payment when due can result in delinquency or default.
Delinquency
- If you fail to make loan payments when due, your loan becomes delinquent.
- Delinquent loans can adversely affect your credit rating.
Default
- If a loan is delinquent for 270 days, it goes into default.
- If you default, you have to pay the entire unpaid balance and any accrued collection fees immediately.
What happens when you don't pay
The consequences of default may include any or all of the following:
- Damage to your credit rating.
- Garnishment of your wages.
- Withholding of your tax refunds.
- Loss of eligibility for federal and state financial aid.
Avoiding delinquency and default
If you're having trouble repaying your loans, don't wait until you fall behind to seek help.
Options for managing your monthly student loan payments include:
