Student-centric advice and objective recommendations
Higher education has never been more confusing or expensive. Our goal is to help you navigate the very big decisions related to higher ed with objective information and expert advice. Each piece of content on the site is original, based on extensive research, and reviewed by multiple editors, including a subject matter expert. This ensures that all of our content is up-to-date, useful, accurate, and thorough.
Our reviews and recommendations are based on extensive research, testing, and feedback. We may receive commission from links on our website, but that doesn’t affect our editors’ opinions. Our marketing partners don’t review, approve or endorse our editorial content. It’s accurate to the best of our knowledge when posted. You can find a complete list of our partners here.
What Happens if You Miss a Student Loan Payment?
A late student loan payment can have financial consequences for borrowers. It’s important to make monthly payments on time to avoid punishments such as wage garnishment or damage to your credit score. Continue reading to learn more about what happens if you miss a student loan payment!
What happens if you miss a federal student loan payment?
Federal student loans are owned by the Department of Education and its student loan servicers. If a borrower misses a student loan payment, their loan becomes delinquent. It will remain in delinquency until you make the past-due payment. Other options for getting out of delinquency include changing your repayment plan or entering deferment or forbearance. The longer your federal student loans are delinquent, the harsher the consequences could be.
After 30 days of missed payment, the borrower could be charged late fees by the loan servicer. After 90 days of delinquency, the loan servicer will report the missed payment to the 3 major credit bureaus: TransUnion, Equifax, and Experian. The missed payment will appear on your credit report and can stay there for up to 7 years.
See also: How do student loans affect credit
If you don’t make the late payment for 270 days, your federal loan will enter default. Federal student loan default can have severe consequences. The entire loan balance becomes immediately due, wages could be garnished, and the loan could be sold to a collection agency.
See also: Student Loan Default: What It Is and How to Avoid It
See also: Student Loan Default: How to Get Out of It
What happens if you miss a private student loan payment?
Private companies such as banks own and distribute private student loans. Each private lender has its own specific rules regarding late payment.
Like federal loans, private student loans enter delinquency on the first day of missed payment. Private lenders will report the delinquent loan to TransUnion, Equifax, and Experian 30-45 days after missed payment.
Private student loans generally enter default sooner than federal student loans. It depends on the lender, but some loans enter default as soon as payment is one day past due. In general, however, private student loans default after 120 days.
Private lenders cannot garnish your wages without taking you to court, but they can send your loan to collections. Borrowers who default on private student loans don’t have the rehabilitation options that federal loans do. Often, the only way to resolve private student loan default is to make the overdue payment.
How to avoid missing student loan payments
If you fear you may miss a student loan payment, contact your loan servicer to discuss your options. They can inform you about deferment or forbearance or, in the case of federal student loans, suggest you sign up for an income-driven repayment plan.
Enrolling in autopay will allow the lender to withdraw your payment from your account every month. This can relieve you from potentially missing the deadline for payment. Additionally, you can combine several student loans into one monthly payment by consolidating or refinancing.
Always pay on time
Make it a priority to keep up with your student loan payments. If you fear you may fall behind, change your repayment plan, or apply for deferment or forbearance. Missing a student loan payment can have worse consequences the longer the payment is overdue.