Delinquency and Default
Delinquency and Default:If you fail to make your scheduled monthly payment on time, you will be considered delinquent. However, if you fail to make payment for 270 consecutive days, your loans will be considered in default.
Both delinquency and default are very serious and can result in:
- Reports to the national credit bureau and may negatively affect your ability to obtain future credit
- The entire unpaid balance of your loan(s), including interest, may become due and payable immediately.
- You may be ineligible to receive additional federal or state financial aid funds
- Your professional license may not be renewed or may be revoked.
- Your wages may be garnished
- Your federal and state income tax refunds and any lottery winnings may be withheld.
- You may lose deferment possibilities
- Your account may be referred to a collection agency
- You may be charged collection cost and attorney fees
How do you avoid delinquency and default?
- Update your address and other contact information with your lender.
- Make sure your deferment/forbearances have not expired. Write the dates you need to apply by on your calendar to ensure that you remember.
- Make your monthly payments on time, put payment due dates in your calendar.
- Sign up for Automatic withdraw so payments are taken directly from your bank account.
- Choose a repayment option that works for you and create a repayment strategy.
- Create a budget so you do not overspend.
What to do if you are contacted by your lender and they say your loans are delinquent or in default?
- Contact us, we may be able to assist you in resolving this issue.
- Call your lender to find out which loan is delinquent or in default.
- Is it a federal loan or a private loan?
- Ask if you can apply for deferment or forbearance
- Ask what other options are available to you.
Remember that you are the best source of information about your student loans. You have access to all the necessary paperwork and services associated with your student loans. We encourage you to take a proactive stance with your loans.