Background and context
Federal student loans are designed to be flexible: they offer income-driven repayment (IDR), deferment, and forbearance to avoid falling behind. Despite those options, the Department of Education considers most federal student loans in default once payments are 270 days late (about nine months). At default, the loan may be transferred to a collection agency and the borrower loses access to many federal protections (U.S. Dept. of Education: https://studentaid.gov/manage-loans/default).
In my 15 years helping borrowers, I’ve seen that the single biggest driver of default is lack of communication—people stop paying and stop responding to notices. If you engage early, servicers usually have tools to prevent default.
How default works (step-by-step)
- Missed payments begin to accumulate; servicers report late payments to credit bureaus after 30 days delinquent in many cases.
- After roughly 270 days without a required payment, the loan is placed in default and sent to collections (U.S. Dept. of Education).
- Consequences can begin quickly: collection fees are added, the full loan balance may be accelerated, and administrative actions can follow (wage garnishment, federal benefit offsets).
