Missing your student loan payment can have serious repercussions, many of which can occur at a faster rate and increased severity than if you had missed a credit card payment. Bing in this situation can be very overwhelming—once you are behind on your debt it can seem impossible to catch up let alone recover. According to the Education Department, over 10% of federal student loan borrowers find themselves defaulting on their loans within 3 years of when they have to begin their repayment terms.

While just leaving your student loans in default—with the thought that you can afford to make the payments, so why bother—is not a healthy financial decision and THERE IS HOPE! There are ways to get your loans out of their defaulted status and enter more favorable repayment terms so that you can start making payments and working towards complete payoff. Read more about these opportunities here and how The Student Loan Advisory Group can assist you.

Before we dive into your possible options, you first need to determine if you have actually defaulted on your loans or if you are just behind on payments (yes, there is a difference—for a little while at least).

If you have
  • Federal Student Loans: It takes 270 days (or about 9 months) of non-payment for the loan(s) to become defaulted. The exception is Federal Perkins Loans; these can default as soon as you are late with a single payment.

  • Private Student Loans: These can be defaulted after 120 late days (about 3 months or 3 missed payments); however, your individual loan contract may specify something else—so read the fine print!

How To KNOW Your Loans Are In Default

You may not be marking a calendar for every day you don’t make a payment on your student loans and may only have an impression that you are close to defaulting if you haven’t already. Well, there are a few ways to verify.

Log Into StudentAid.Gov. ALL student loan borrowers have an account on this site and can access it with their FSA ID (it’s created for you when you get a loan). If you have never logged in or don’t remember your FSA ID, there are links to recover your login and password. Once logged in, you’ll be able to see all of your federal student loans—and what their status is—and who your loan servicer is. If it is labeled as “defaulted”, then you’ll know for sure.

Pull your full credit report. You can do this once a year at no cost and is beneficial to do anyways to stay on track of your score and accuracy of the reporting. All of your federal and private student loans will be listed on your full credit report (along with who your loan servicer is)—but these aren’t necessarily real-time indicators because it can take up to 30 days for credit agencies to send an update to the credit reporting agencies. So, if this doesn’t show your loans as defaulted, it is possible they could be but haven’t reflected yet in your credit as such.

Contact your loan servicer. If you aren’t sure who this is, you can check the StudentAid.Gov site or your credit report for loan servicer information. You could also look through old mail or bills for indications of your loan servicer. While contacting them may seem intimidating since you are late (possibly to the point of defaulting) it is one of the best ways to verify beyond a doubt if your loans have reached defaulted status.

You can also contact us to do the research and verification for you. We can also discuss next steps; what to expect if your loans are defaulted, what will happen if they haven’t yet, and what can be done to recover from this.