Generally, if you miss your monthly payments and aren’t in a deferment or forbearance, Navient will report the missed payments to the credit bureau. The late payments will cause your credit score to drop and will remain on your credit report for 7 years.
You don’t have to worry about wage garnishment or having your tax refund or Social Security benefits are taken to pay back your student loan debt until after your default. But even then, that only happens for federal student loan default. Private student loans can’t garnish your wages until they sue you and get a judgment.
How long does it take them to sue? They usually don’t sue right away. More commonly, they sue a few years after your last payment.
Those are the everyday things that happen when you don’t pay Navient regardless if the loan is federal or private.
Here’s a breakdown of what happens, depending on the loan type.
Federal student loans. When you don’t pay federal student loans Navient is the loan servicer for, after you default, Navient will send the debt either to a collection agency or to the U.S. Department of Education.
Which one it sends the loans to depends on the type of loan it is.
If it’s a Federal Family Education Loan, the loan may be owned by a guarantor agency.
If so, then the loan will go to a collection agency. But if it’s a Direct Loan or FFEL Loan owned by the Department of Education, it will be sent to the Department. From there, the Department will send the defaulted loan to the Default Resolution Group.
Private student loans. When you fail to make your student loan payments for private loans Navient owns, here’s what generally happens.
First, Navient will send your loan to an internal collections unit. A few months later, if that unit is unable to collect, then the loan will be sent to another unit. And if that unit can’t collect, then the loan will end up with the recovery unit.
Once your loan is with the recovery unit, you’ll typically be asked to set up monthly payments to keep the debt from going into collections. You may even be offered a student loan settlement.
Learn More: How to Tell if Navient Loan is Federal or Private