The Department of Education announced that collections on defaulted student loans will resume on May 5, 2025.
Failing to make payments on your federal student loan may cause you to end up in default. You will first enter delinquency on your loans before you enter default. Here is the timeline from being delinquent to going into default:
Day 1: Missed Payment
As soon as you miss a payment, your loan becomes delinquent, even if it’s just one day late.
Days 1–90: Early Delinquency
During this time, your loan servicer will likely reach out with reminders or warnings.
Their credit is usually not affected unless you're 90+ days late.
Day 90+: Reported to Credit Bureaus
If your loan is 90 days delinquent, it gets reported to the three major credit bureaus, which can hurt your credit score.
Day 270 (about 9 months): Default
If you don’t make a payment for 270 consecutive days (on Direct Loans or FFEL loans), the loan goes into default.
When your loans enter default, your credit score is significantly impacted. The default status can remain on your credit report for up to seven years. The government may garnish your wages (up to 15 percent of disposable income) without a court order. Federal and state tax refunds and Social Security benefits may be seized through a process called a treasury offset.
You will also lose access to federal student aid, deferment, forbearance, income-driven repayment plans, and loan forgiveness programs.
While the quickest way to get out of default is by repaying the defaulted loan in full, this is often not a realistic option for most borrowers.
There are two programs for borrowers to get out of default, loan consolidation and loan rehabilitation. Consolidation is a quicker process, but will not remove the impact on your credit score. Loan rehabilitation is a longer process, but wipes your slate clean. You can read more about both of these programs here:
Loan Rehabilitation: https://bysavi.zendesk.com/hc/en-us/articles/40638301508627-Getting-out-of-Default-Loan-Rehabilitation
Consolidation: https://bysavi.zendesk.com/hc/en-us/articles/40639044800403-Getting-out-of-Default-Consolidation
You can read more about wage garnishment/treasure offset here: https://bysavi.zendesk.com/hc/en-us/articles/40639995935891-Default-and-Wage-Garnishment