For many American student loan borrowers, the risk of default feels closer by the day.
More than 5 million borrowers with student loans from the Department of Education were in default as of June 2025, according to Federal Student Aid data. And more than 4 million more are in late-stage delinquency and at risk of defaulting in the coming months.
Defaulting on your student loan can carry a major cost, from mounting interest charges to garnished wages and withheld tax refunds. While your loans are in default, you also won’t be eligible for any additional federal student aid or for benefits like deferment and forbearance, and your credit score may suffer.
The best thing you can do is avoid default status if you haven’t reached it yet, or take action to get out of default as quickly as you can.
As soon as you miss a student loan payment, your loan is considered delinquent. But a missed payment doesn’t necessarily mean you’ll face long-term consequences. Make your past-due payment as soon as possible or talk to your loan servicer about other options such as deferment or forbearance.
If you don’t make your loan payment within 90 days, the delinquency is reported to the credit bureaus — which can bring down your credit score and remain on your credit report for several years.
By still leaving your delinquent student loan unpaid, you’ll risk moving into default.
The type of student loan you have determines when it moves from delinquency to default. Here’s what that timeline looks like for different types of federal student loans:
William D. Ford Federal Direct Loan Program: The most common federal loans, this type includes Direct Subsidized Loans, Direct Unsubsidized Loans, Direct PLUS Loans, and Direct Consolidation Loans, all issued by the Department of Education. These loans go into default if you don’t make a payment for 270 days.
Federal Family Education Loan (FFEL) Program: These loans were last issued in 2010, and included Subsidized Federal Stafford Loans, Unsubsidized Federal Stafford Loans, FFEL PLUS Loans, and FFEL Consolidation Loans. These loans are considered in default after 270 days without payment.
Federal Perkins Loan Program: These low-interest loans were last issued in 2017, and final disbursements were made in 2018. Perkins Loans may be issued by your school. There are different standards for defaulting with a Perkins loan than other federal student loans, and just missing a payment could put you in default.
The first thing you should do when your student loan goes into default is contact your loan servicer. You can find your servicer by logging into your federal loan account at StudentAid.gov.
The most straightforward way to get out of default is to repay your loans in full. However, making a large lump-sum payment is not a likely option for most borrowers.
The other options for defaulted student loans are loan consolidation or loan rehabilitation. Your individual circumstances and type of loan can impact your eligibility for either option, and will determine which is the right choice for you. Make sure to discuss the details of your loan with your loan servicer to help decide.
You can start a loan rehabilitation program with your loan servicer to get out of default and have the record of default removed from your credit report. This may be the best option if you’re eligible and you don’t want your student loan default to affect your credit history long-term.
The terms of the rehabilitation also depend on the type of loan you have.
For Direct Loans and FFEL Loans, you’ll need to agree to the terms and make nine on-time (within 20 days of the due date) monthly payments toward your defaulted loan over 10 consecutive months. Your loan servicer will determine the payment amount, but it can range from 10% to 15% of your monthly income.
For Perkins Loans, rehabilitation terms are similar. You’ll need to make a full monthly payment (as determined by your loan servicer) within 20 days of the due date for nine consecutive months.
One important thing to know is that you can only rehabilitate your loans once. If you go into default again, you’ll need to take a different action to recover.
Beginning on July 1, 2027, borrowers will be allowed to rehabilitate a defaulted loan twice, thanks to changes made in the One Big Beautiful Bill Act.
When you consolidate your defaulted federal loan, both the principal and any interest charges you owe will be rolled into a Direct Consolidation Loan. Then, you’ll agree to pay the new loan under an income-driven repayment (IDR) plan based on a percentage of your income.
The other option you’ll have is to make three consecutive, on-time payments toward your defaulted loan before you consolidate it to a Direct Consolidation Loan. This payment amount is set by your loan servicer, and must be “reasonable and affordable” for your financial situation. After you make these payments and consolidate the loan, you can choose any repayment plan you qualify for, including IDR.
Once you’ve consolidated and begin paying down your new Direct Consolidation Loan, you’ll regain federal loan benefits such as deferment, forbearance, and loan forgiveness. However, your default will stay on your credit report.
As of May 2025, the Department of Education resumed collections on defaulted student loans, which had been paused since 2020. If you’ve defaulted on your federal student loan, the loan can become due in full immediately. When this happens, your loan servicer can begin to take money from your wages or income tax refund (and other federal payments you may receive) to use toward loan repayment.
You’ll receive notice before this happens and can take actions to get your loan out of default status to avoid your wages and payments being withheld — including loan consolidation or rehabilitation.
If you’ve already had your wages garnished to repay your defaulted loan, you may not qualify for consolidation until the order to garnish your wages is lifted. If you choose loan rehabilitation, your servicer may continue to garnish your wages or collect payment from your tax refund (in addition to your required payments), either until your loan is no longer in default or you’ve made at least five rehabilitation payments.
Just like federal loans, missing multiple monthly payments toward a private student loan can lead to default. Exactly when your student loan moves from delinquency to default will depend on your lender, though it’s usually within 120 days of your first missed payment.
Getting out of default from a private student loan will also vary depending on your lender. Federal rehabilitation and consolidation plans aren’t available for private loans. Your lender or the collections agency managing your loan can give you more information about your options, such as reduced payments or payment plans. But you should make sure to reach out quickly after entering default status to avoid mounting collection fees and ongoing effects on your credit.
This article was edited by Alicia Hahn.