Defaulting on a loan is never good. It gets debt collectors calling you and accelerates the debt (you owe all of if NOW, not just the payments that you are behind. But when are you in default on a federal student loan?
Well, once you are more than 270 days (9 months) behind in your payments, you are in default. Before that, you are considered merely "delinquent." That’s when things get serious. Your loan is referred to a collection agency (CA), who will start coming after you for payment.
Once you are in default you can be subject to things like:
- Administrative Wage Garnishments
- Tax Refund Intercepts
- Social Security Offset
The best thing to do is try to get into an affordable payment plan while you are still delinquent. If the 270 is fast approaching, get a deferment or forbearance to stop the clock while you work on it.
If you live in New Jersey and are struggling with payment on federal student loan debt, I may be able to be of assistance. Just download this questionnaire, fill it out, and then fax it to me at 856-686-9911 or e-mail it to me. I will then review it to determine if I can be of assistance and contact you to discuss representation.