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Managing Repayment

Delinquency and Default

Loan Repayment Options

If you are late on a scheduled payment, you are considered to be delinquent on your loan. If you are more than 90 days late, your delinquency will be reported to national credit bureaus.

Basically speaking, these are the worst things in the world for a borrower.

If you are 270 days late on your scheduled payment, you are in violation of your loan agreement, and it will be assumed that you do not intend to repay your loan. The federal government will buy your loan from your servicer and track you for payment. Defaults are reported to national credit bureaus and remain on your credit report for seven years. This may affect your ability to obtain an auto loan, credit cards, or other financing.

Other consequences include:

  • The entire unpaid amount of your loan, including interest, may become immediately due and payable.
  • The federal government may collect loan payments from federal and state income tax refunds, garnished wages, or state lottery winnings.
  • You will be ineligible to receive any additional federal or state financial aid funds (Federal Pell and Supplemental Educational Opportunity Grants, Work Study, and the Perkins, Subsidized and Unsubsidized Loans, and/or PLUS loans) at any institution.

Your default will have an effect on the future of this loan program and could jeopardize the educational opportunities of future students.


A deferment is a period of time during which you are not required to make payments. During the period of deferment, interest continues to accrue on the loan. If you have a Federal Subsidized Loan, the government has been paying the interest for you; in case of deferment, the government will continue to pay it. For Federal Unsubsidized Loans, you continue to be responsible for the interest during a deferment period.

You may qualify for a deferment if you meet any of the following conditions:

  • Half-time Study
  • Unemployment
  • Economic Hardship
  • Graduate Fellowship
  • Rehabilitation Training
  • Military

Deferments are not automatic; you must apply for them. You must be fewer than 270 days delinquent, make your request in writing, provide the necessary documentation, and have a loan type that is eligible for deferments (Subsidized and/or Unsubsidized, PLUS or Consolidation Loan). There are numerous deferment options, depending on your loan type. Contact your lender for more information.


A forbearance is a temporary end to or reduction of payments, or an extension of time for making payments. Lenders may grant forbearance if you're having difficulty repaying your loan but aren't eligible for a deferment. The objective is to prevent you from going into default on your loan or to allow you to resume honoring your repayment obligation after you've defaulted. The lender may grant forbearance to you only if they believe that you intend to repay the loan, but are unable to make payments due to poor health or other acceptable reasons.

When you're in forbearance, interest continues to accrue on your account. The forbearance period is excluded from the period of repayment. Thus, if your repayment period is 10 years, you won't be using up part of that 10-year period while you're in forbearance. Lenders may not charge you any fees to grant you a forbearance. Lenders also can't report negative information about your repayment status to credit bureaus simply because they have granted you a forbearance. They could report negative information to credit bureaus if you were behind on payments and did not receive a forbearance.

Call your lender/servicer to find out if they have a special form for forbearances. As with a deferment, you must continue to make payments on your loan until you're notified that the forbearance has been granted.

For more information on repaying your loans go to