Student Loan Default

The repayment of student loans is the responsibility of the student. Failure to repay loans promptly can adversely affect students long after graduation.
Before missing a payment students should contact the lender to determine eligibility for an economic hardship forbearance or other forbearance or repayment option to help better manage loan repayment.

Students contacted from their lender about non-payment should contact the lender immediately to avoid delinquency or entering default. Loans in delinquency or default could be sent to the guarantor or the U. S. Department of Education for collection. Students may be able to arrange a forbearance or deferment, but only by communicating with the lender.

Federal regulations require loan guarantors to take the following measures with default of delinquent loans:

  • Start formal collection activity on the student's account
  • Turn the account over to a collection agency if the guarantors are unsuccessful in collecting on the account
  • Add collection costs, including attorney's fees (up to 22%),  to a student's loan, increasing the total amount owed
  • Garnish wages

In addition:

  • A student's federal income tax refund may be seized in an effort to satisfy student loan debt
  • The loan could be transferred to the U.S. Department of Education for collection
  • Students may lose a professional license, such as legal, medical, nursing, teaching, etc.
  • Students lose eligibility for future student financial aid under the federal programs 
  • Students lose the right to deferments or forbearance until the loan is rehabilitated.

Students may go to the National Student Loan Data System (NSLDS) at and using their FAFSA PIN access their loan record and identify their lender. Students can recover their FAFSA PIN at