A federal student loan is considered to be in default if payments haven’t been made for a set period of time - for Direct loans, the timeline is 270 days.
Avoiding default on your loans is very important, as it can have serious negative consequences. The default will be reported to credit agencies and can significantly lower your credit score. There are major collection costs associated with default, and the federal government can also garnish your wages, tax return, and Social Security or disability benefits indefinitely. When your wages or federal payments are garnished, they go to the collection costs first before the balance of your loans. You can read more about the details on the Federal Student Aid website.
There is no statute of limitations for federal loans in default, and loans in default are not eligible for programs like income-driven repayment or Public Service Loan Forgiveness. All Direct Consolidation Loans disbursed on or after July 1, 2026, will only be eligible for the Tiered Standard repayment plan or the Repayment Assistance Plan (RAP). RAP is a new income-driven option that works differently from legacy IDR plans and is the only plan eligible for Public Service Loan Forgiveness.
If you’re having trouble making your monthly loan payments, you must navigate and enroll in an income-driven repayment plan. Before July 1, 2027, you may request a temporary deferment or forbearance. After that date, unemployment and hardship deferments will be eliminated, and the length of time you can enroll in a general forbearance will be reduced.
If you’re already in default, you’re not alone, and there are several options for getting out. We have another article on that here.