Federal student loans generally enter default after at least 270 days without scheduled payments. Default can make the full balance due, damage your credit history, restrict access to additional federal aid or certain repayment benefits, and expose you to collection actions. Those actions do not necessarily begin on the day default starts, and the consequences depend on the loan and your circumstances.
When does a federal student loan go into default?
Federal Student Aid says a federal student loan goes into default after you miss scheduled payments for at least 270 days. Before that point, the loan is generally delinquent. Default is a status; collections are actions that may follow, not the same event.
After default, a Direct Loan generally transfers to the U.S. Department of Education’s Default Resolution Group. A defaulted Federal Family Education Loan (FFEL) generally goes to a guaranty agency. The holder or agency handling your loan matters because it can affect where you get account-specific information and which options apply. Federal Student Aid’s default FAQ explains the process.
When can collections start?
Default does not mean that wage garnishment or a Treasury offset begins immediately. Federal Student Aid says involuntary collection may begin after more than 360 days without payment or action to resolve the default. A Treasury offset is preceded by written notice. Treat your own account status and notices as controlling for deadlines and next steps; timing can vary.
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Federal Student Aid says the government may take a tax refund or some federal benefit payments, or garnish up to 15% of a paycheck, to collect a defaulted loan. The 15% is a stated maximum, not a prediction of what will be taken from any particular borrower. Federal Student Aid’s 2026 payment-preparation guidance describes these collection methods.
What can happen to you and your loan?
Federal Student Aid lists several possible consequences. Not every consequence occurs in every case; the loan type, account and collection process matter.
- The balance may be accelerated: the full unpaid balance and interest can become due at once.
- The debt may grow: interest and collection expenses may add to the amount owed.
- Credit history may be affected: the default and earlier missed payments can appear in credit reporting.
- Federal benefits may be limited: you may lose eligibility for additional federal student aid or certain repayment benefits while in default.
- Collections may be involuntary: possible actions include wage garnishment and Treasury offset of tax refunds or federal benefit payments.
- Court action is possible: Federal Student Aid lists litigation as a potential consequence.
- A school may withhold an official transcript: Federal Student Aid says a borrower may request an unofficial transcript.
See Federal Student Aid’s overview of default consequences for its full list.
What happens to your credit record?
Credit reporting can involve more than one entry. Federal Student Aid says that if you do not act within 65 days after default placement, the Default Resolution Group may report the loans to Equifax, Experian, Innovis and TransUnion. Reporting by a prior servicer may also appear.
Rehabilitation and consolidation have different credit-report effects. Completing rehabilitation prompts the Department to request removal of the default record, but late payments reported before default may remain. Consolidation can leave the default and preceding late-payment history on your credit record for up to 10 years. These are distinct from one another: removing the default marker does not necessarily erase the loan’s earlier payment history. Federal Student Aid explains the credit-report effects of resolving default.
How can you get out of default?
Federal Student Aid identifies rehabilitation and Direct Consolidation as principal routes. A repayment agreement or paying the debt in full may also be options in some circumstances. Compare the payment terms, time to resolve, interest and collection costs, credit-report effect, whether collections pause, and which benefits return. Getting out of default may restore access to benefits such as deferment, forbearance and repayment-plan choices; confirm the effect for your loan with its current holder.
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| Option | How it works | Important trade-off |
|---|---|---|
| Rehabilitation | Sign an agreement and make nine qualifying, on-time voluntary payments. Direct Loan and FFEL borrowers make them within 10 consecutive months; Perkins borrowers make nine consecutive payments. | Completion ends default and prompts a request to remove the default record. It takes months. Collections may continue until default ends or at least five rehabilitation payments have been made. |
| Direct Consolidation | Apply for a Direct Consolidation Loan as a way to resolve default. Federal Student Aid describes this as faster than rehabilitation. | The default history may remain on your credit record, and capitalized interest and collection costs can increase the debt. |
| Repayment agreement | Ask the loan holder whether you qualify and what payment schedule and terms apply. | The default record remains. Confirm notice deadlines, account eligibility and how timely payments affect collection actions. |
| Pay in full | Ask the loan holder for the current payoff amount and payment instructions. | This resolves the balance but may not be practical for many borrowers. |
Rehabilitation payment amount
For the standard rehabilitation calculation described by Federal Student Aid, the monthly payment is 15% of annual discretionary income divided by 12. The agency also describes an alternative calculation based on income and expenses. Check the terms offered for your specific loan rather than assuming the standard amount will apply. Federal Student Aid’s rehabilitation guidance covers the payment and completion requirements.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What notices and borrower rights should you know about?
You may request documents related to the debt. Federal Student Aid describes a 30-day period from an administrative wage-garnishment notice to request a hearing, and a 65-day period after a Treasury offset notification to request a hearing to dispute the debt. Read the actual notice carefully and follow its instructions and dates; do not rely on a general timeline if your notice gives a deadline.
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For federal loans held by the Department of Education, the Default Resolution Group is the official resolution contact. You can review federal loan information through StudentAid.gov; if your account is with the Default Resolution Group, check MyEdDebt.ed.gov. For some defaulted FFEL loans, contact the guaranty agency instead. The Federal Student Aid FAQ explains how to identify the right contact.
How to avoid paid-help scams
The Default Resolution Group does not charge borrowers for its services. Be cautious of companies that charge enrollment, subscription or maintenance fees to help with federal loan default. Use the Department’s official account tools and the contact listed on your notice to verify who is handling your debt before sharing information or paying for assistance. Federal Student Aid’s guidance on avoiding default-assistance scams provides more detail.
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