Understanding Delinquency vs. Default in Student Loans

#1 Student loan lawyer

Updated on October 8, 2023

In terms of “delinquent vs. default” for student loans, missing a scheduled payment makes your loan delinquent. If you miss enough payments, your loan will default, putting you at risk for wage garnishment, loss of financial aid, and other penalties.

Delinquency is your first warning sign, akin to a yellow light, that you’re falling behind on payments. On the other hand, default is a red alert, signaling a critical situation that demands immediate action.

Of the two, delinquency is the easier to fix. You can often make a payment or request a forbearance. But getting out of student loan default is much harder. And if you have private student loans? The only ways to deal with it are to pay the loan balance in full, negotiate a settlement, or file bankruptcy.

Key Insights:

  • Delinquency and default both signify missed payments but result in vastly different outcomes for the student loan borrower.

  • Delinquency begins the moment you miss a payment and can tarnish your credit report in as little as 90 days.

  • Default results from prolonged delinquency, unleashing a cascade of harsh consequences, including wage garnishment, Social Security offset, loss of financial aid, and potential legal actions.

Related: What Is Student Loan Delinquency?

Understanding Delinquency and Default in Student Loans

Delinquency and default are not just terms. They are stages with specific timelines that escalate the consequences of missed student loan payments.


Delinquency starts the moment you miss a payment. It can have serious repercussions after just 90 days, so consider it your immediate cue to get back on track.

For federal student loans, prolonged delinquency can escalate into default after 270 days for Direct Loan and Federal Family Education Loan (FFEL) Program loans.

For Federal Perkins Loans, default occurs if a payment isn’t made when due.


Default is a stage you must avoid. For federal loans, it typically occurs when you haven’t made a payment in more than 270 days for Direct Loans or FFEL Program loans. But for Federal Perkins Loans, default is immediate upon a missed payment. The consequences are long-lasting and extend beyond a poor credit score, potentially affecting your job prospects.

Related: How to Get Student Loans Out Of Default Fast

Private Student Loans

According to the Consumer Financial Protection Bureau (CFPB), the general guideline is that private student loans often default after 90 days of missed payments. But your promissory note usually outlines the specific terms for when your loan becomes delinquent or defaults.

Most private lenders proceed to charge off the loan after about 120 days of missed payments, effectively writing it off as a loss.

Once your loan is charged off and declared in default as per your promissory note, options for resolution become severely limited and typically lead to debt collection efforts.

Related: What Happens If You Default On Private Student Loans?

Key Differences Between Delinquency and Default




1. Definition

Begins when a payment is missed by the due date.

Occurs after a prolonged period of missed payments or failure to meet loan terms.

2. Timeline

Starts the day a payment is missed.

For federal loans, default is at 270 days; for private loans, it's at 120 days.

3. Consequences

Late fees may apply; after 90 days, credit bureaus are notified.

Entire loan balance due immediately; wage garnishment, tax refund offsets, and loss of federal aid.

4. Credit Impact

Affects credit score after 90 days.

Causes long-term damage to credit, affecting future loans, housing, and employment.

5. Legal Ramifications

Late payments added to credit report and may lead to wage garnishment, bank account levies, and a lien being placed on your home.

May lead to legal actions like wage garnishment and tax refund offsets.

How to Sidestep Student Loan Delinquency and Default

Let’s get straight to the point: avoiding delinquency or default is crucial for your financial health. The good news is there are proactive steps you can take to steer clear of this financial pitfall.

  • Create a Budget: The first line of defense is a well-crafted budget that includes your student loan payments. Think of it as your financial roadmap, not just a spreadsheet.

  • Understand Your Grace Period: Know the grace period that comes after graduation so you’re not caught off guard by the first bill.

  • Choose the Right Repayment Plan: Federal loans offer various repayment plans, like income-driven options. Pick one that aligns with your financial situation.

  • Communicate with Your Loan Servicer: If life throws you a curveball, don’t ignore your loan servicer. Discuss options for lowering or pausing your monthly payments.

  • Consider Deferment or Forbearance: Facing a financial hiccup? Deferment or forbearance can temporarily stop your payments, giving you time to get back on your feet.

  • Explore Loan Forgiveness: If you work in public service or other qualifying fields, loan forgiveness could be within reach.

  • Consolidate or Refinance: Whether you have federal or private loans, consolidation or refinancing can lower interest rates and make payments more manageable.

  • Automate Payments: Set up automatic payments to minimize the risk of late payments.

  • Seek Expert Advice: Consult non-profit agencies or student loan advisors for insights. Organizations like The Institute of Student Loan Advisors offer free advice.

  • Monitor Your Credit: Regularly check your credit report for accuracy. If you see errors, dispute them right away.

Steps to Take if You're Facing Delinquency or Default

Don’t lose hope if you’ve missed payments or have already defaulted. There are strategies to lessen the impact of late payments and the repercussions of default.

General Advice

  • Open Communication: Regardless of the type of loan, your first step should always be to communicate with your loan servicer or lender about your financial situation.

  • Note: Recovery strategies vary depending on your loan type and servicer. Keep lines of communication open to formulate the most effective recovery plan for your unique circumstances.

For Federal Student Loans

If You’re Delinquent

  • Talk to Your Loan Servicer: Openly discuss your financial difficulties and explore available solutions.

  • Use Deferment or Forbearance: These options can temporarily suspend or reduce your loan payments.

  • Switch to an Income-Driven Plan: If your current plan is unaffordable, consider switching to an income-driven repayment plan.

If You’re in Default

  • Fresh Start Program: This U.S. Department of Education program can remove the default status from your credit reports.

  • Loan Rehabilitation: Make 9 on-time payments over 10 consecutive months to restore your loans to good standing.

  • Loan Consolidation: Combine defaulted loans into a new Direct Consolidation Loan to reinstate federal aid eligibility.

For Private Student Loans

If You’re Delinquent

  • Talk to Your Lender: Discuss your financial difficulties and explore options like temporary payment reductions.

  • Consider Refinancing: This could lower your interest rates and monthly payments.

If You’re in Default

  • Negotiate with Lender or Collections: Discuss repayment options, including the possibility of a settlement.

  • Look into Refinancing: Some private lenders may offer refinancing for defaulted loans based on your credit profile.

  • Seek Legal Advice: Consult a specialized student loan attorney if you’ve exhausted all other options.

Bottom Line

The burden of student loan debt and the serious consequences of default can strain your financial stability, particularly if you’re also managing credit cards or personal loans.

If you’re past due on federal student aid payments or dealing with a collection agency, rest assured that affordable payment plans are typically available.

You’re not alone in this struggle. Millions of Americans are also navigating the costs of higher education and seeking viable student loan repayment strategies.

My team is committed to your financial well-being. Don’t let the length of time you’ve faced these challenges control your future. Need personalized advice? Book a call with us today.

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Stop Stressing


What Should I Do If I've Defaulted on a Private Student Loan?

Act quickly if you've defaulted on a private student loan. Contact your lender to discuss options like payment reductions or forbearance. Consider negotiating a settlement, refinancing the loan, or seeking specialized legal advice. Options may vary based on your loan servicer.

Is a Fresh Start Advisable for Defaulted Loans Older Than 7 Years?

Yes, a Fresh Start is advisable for defaulted federal loans older than 7 years. This one-time program helps regain student aid benefits and removes the default from your credit record.

What Should You Expect If You're About to Default on a Private Student Loan?

Expect credit score damage, difficulty in refinancing, and potential legal action if you're nearing default on a private student loan. You may also face collection attempts and additional fees like late fees and court costs.

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