🚨 In Default on Your Student Loans? Here’s What To Do

If your student loans have gone into default, don’t panic — you have several options to fix it and get back on track. Here’s a quick guide:

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What Happens When You’re in Default?

• Credit score damage 📉

• Wage garnishment

• Seizure of tax refunds

• Loss of federal aid eligibility

• Collection fees added

Important: For federal loans, default usually means you haven’t paid in 270+ days. For private loans, it can happen even sooner.

✅ First step: Log into studentaid.gov or contact your loan servicer to confirm your loan status.

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Your Options to Get Out of Default

1. Loan Rehabilitation

• Make 9 monthly payments (based on your income) within 10 months.

• After completing, the default status is removed from your credit report.

• You regain eligibility for deferment, forbearance, and forgiveness programs.

Note: You can only rehabilitate once per loan.

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2. Loan Consolidation

• Combine your defaulted loan(s) into a new Direct Consolidation Loan.

• You must agree to repay under an Income-Driven Repayment (IDR) Plan, or

• Make three consecutive on-time payments first.

Heads-up: Consolidation doesn’t erase the default from your credit report, but it marks the loan as “paid.”

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3. Full Payoff

• Pay off the entire balance in one lump sum.

• Not always realistic, but it’s the fastest fix if possible.

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Special Notes for Private Loans

Private loan defaults work differently — options vary depending on your lender. Contact them directly to discuss:

• Settlements

• Payment plans

• Refinancing

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After You Get Out of Default

• Enroll in an affordable repayment plan (like an IDR plan).

• Set up autopay to never miss a payment again.

• Start rebuilding your credit 🚀.

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Need Help?

Drop your questions below or send us a private message! 🎯
We’re here to help you choose the best path based on whether you have federal or private loans.