:: What Does It Mean To Be In Default? ::
Defaulting on your student loan occurs when:
- Your loan is delinquent (past due) for 270 days or more.
- You fail to repay your loan according to the terms agreed upon in your Master Promissory Note.
- You fail to submit on-time requests for a deferment or cancellation.
At that point, your loan is purchased and can be collected on behalf of the U.S. Department of Education.
After default, you have 60 days to establish satisfactory repayment arrangements. Failure to make a payment, or enter into a satisfactory repayment arrangement, within 60 days results in a negative report to national consumer reporting agencies, thereby seriously damaging your credit.
Defaulting on your loan is serious, but not impossible to overcome. You do have options to help you get out of default; calling your lender should be the first step.