If you’re having trouble making payments on your loans, contact your loan servicer as soon as possible. Your servicer will work with you to determine the best option for you. Options include:
- Changing repayment plans
- Requesting a deferment—If you meet certain requirements, a deferment allows you to temporarily stop making payments on your loan
- Requesting forbearance—If you don’t meet the eligibility requirements for a deferment but are temporarily unable to make your loan payments, then, in limited circumstances, forbearance allows you to temporarily stop making payments on your loan, temporarily make smaller payments, or extend the time for making payments
If you stop making payments and don’t get a deferment or forbearance, your loan could go into default (see default section below), which has serious consequences.
If you default, it means you failed to make payments on your student loan according to the terms of your promissory note, the binding legal document you signed at the time you took out your loan. In other words, you failed to make your loan payments as scheduled. Your loan guarantor, and the federal government all can take action to recover the money you owe. Here are some consequences of default:
- National credit bureaus can be notified of your default, which will harm your credit rating, making it hard to buy a car or a house
- You will be ineligible for additional federal student aid if you decide to return to school
- Loan payments can be deducted from your paycheck
- State and federal income tax refunds can be withheld and applied toward the amount you owe
- You will have to pay late fees and collection costs on top of what you already owe
- You can be sued
For more information and to learn what actions to take if you default on your loans, see the Department of Education’s Default Resolution Group website.