Avoid Default

Contact your loan servicer before you miss a payment on your Federal Student Loan(s). 
If you are having trouble making payments your loan servicer can advise you on: repayment plans, deferment, or forbearance. 
Depending on your economic situation at the time your loan servicer can help set you up with the best option to meet your needs. 

Failure to repay your student loan can result in the following:

  • A damaged credit rating
  • Loss of generous repayment schedule and deferment options
  • Possible seizure of federal and state income tax refunds due
  • Exposed to civil suit
  • Referral of the account to a collection agency
  • Liability for collection costs and attorney’s fees
  • Garnishment of wages

The Department of Education offers several options for getting out of default. You can visit https://myeddebt.ed.gov/ or call 1-800-621-3115 for more information. This site will provide you with information on the repayment collection of the following loan and grant programs:

  • Federal Family Education Loans (FFEL), which include Federal Stafford, Federal Consolidation, and Federal PLUS loans - When placed in default and not repaid, these loans will be assigned to the Department's Default Resolution Group for collection.
  • Direct Loans, which includes Federal Stafford, Consolidation and PLUS loans that are offered through the William D. Ford Direct Loan Program - This includes TEACH Grants that have been converted to Direct Unsubsidized Loans. When placed in default, these loans are assigned to the Department's Default Resolution Group.
  • Federal Perkins Loans - When placed in default, Perkins Loans may remain with the school or be assigned to the Department for collection.
  • TEACH Grants, Federal Pell Grants, Federal Supplemental Educational Opportunity Grants (FSEOG), Academic Competitiveness Grants and National SMART Grants - In certain instances, you may have to repay part of a Federal grant that was awarded to you. When repayment is required, these grants are assigned to the Department for collection due to an over award payment or the recipient withdrew from the eligibility program early.

If you are not sure what type of loan or grant you have, check your original loan/grant document(s) or use our National Student Loan Data System. If your loan/grant is not one of the loans/grants listed above, the information on this site does not apply to you. **Source: https://myeddebt.ed.gov/​