What Happens If You Miss A Student Loan Payment?

Student loan debt isn't exclusively a problem for millennials and Generation Z. It's actually the Generation X cohort that carries the largest overall debt burden from college. But that's looking at an aggregate picture. The average debt for an individual student graduating with a bachelor's degree has undeniably risen dramatically in recent years, from less than $10,000 in the early 1990s to almost $40,000 in 2024. And for the younger generations, that debt combined with the rising cost of living and slowing wage growth has been an ongoing impediment to building wealth since the 2007 economic crisis.

It can be incredibly depressing, especially when one is on an already tight budget, to see the bill for that long-finished degree every month. And it's not a bill you'd be advised to blow off; student loan accounts are marked delinquent one day after a missed payment, and failure to pay back the loan can destroy your credit rating and cost you your tax refund and Social Security benefits. But if you have a hard month and fall behind on a single payment, you have a long road to travel before your account is marked in default and you face the wrath of the departments of the Treasury and Education.

While accounts are marked delinquent just one day after a missed payment, no other consequences kick in immediately. You'll have 90 days to make up the missed payment. After that, the major credit agencies will be notified your account is delinquent. You have 270 days from the missed payment to avoid going into default.

The 90- and 270-day time frames for missing a student loan payment apply to federal loans, those issued by the federal government. But many student loans are issued by private lenders, and those lenders tend to be much less lenient when and if a borrower slips up in their payments. These loans usually carry a higher price tag, their interest rates are often higher/variable depending on market forces, and some even demand that payments start coming in while you're still in school.

Just what the timeline is for action on a private student loan account will vary depending on the issuing body, be they a bank, agency, or school. But they may well take aggressive action to collect on your debt. Private loan issuers can report your debt to consumer reporting agencies, send debt collectors on your tail, or take the matter to court. The statute of limitations on lawsuits concerning private loans vary widely by state but can be nullified by certain actions on the part of the borrower — even acknowledging you owe the lender money can open you back up to a lawsuit. And even if the statute of limitations is passed and safely in place, a private lender can keep coming for their money. (Here's more on what a debt collector is legally allowed to do.)

Whether your lender is a private entity or the federal government, the consequences for missing a student loan payment continually can be steep. And any notice about being branded delinquent or in default can be intimidating. However, if you do find yourself in those circumstances, you can get yourself out.

If you're struggling to keep up with your loan payments, you should immediately notify the lender. In the case of a federal loan, you can change your repayment plan, request a deferment, or make up the payment. It's worth bearing in mind in the latter case that simply meeting your next payment isn't enough; you do have to address the specific payment that you missed within 90 days to get out of delinquency.

Even if you end up in default on your student loans, though, you have options. However, it's even more imperative in that situation that you notify the lender and explain why you haven't been able to keep up with your payments. The sooner you make contact and arrange to address the outstanding payments in some fashion, the sooner you can get out of default status. Accounts in default can be rehabilitated, resolving the issue through a series of one-time payments agreed upon with the loan holder. You could also consolidate your loans. This being said, resolving the issue won't wipe the record of default from your credit score; so if you can at all avoid falling into default, do.