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For student loans authorized under Section 435(i)Title IV of
the Higher Education Act, default occurs on a Federal Family
Educational Loan (FFEL) program loan after a default has
persisted for 270 days in the case of a loan repayable in
monthly installments or 330 days in the case of a loan repayable
in less frequent installments. The change is effective for loans
for which the first date of delinquency occurred on or after
October 7, 1998. During the delinquency period, your loan holder
must exercise "due diligence" in attempting to collect the loan;
that is, your loan holder must make repeated efforts to locate
and contact you about repayment. If your loan holder’s efforts
are unsuccessful, steps will be taken to place the loan in
default and to turn the loan over to the
guaranty agency in your
state. Your loan holder may "accelerate" a defaulted loan, which
means that the entire balance of the loan (principal and
interest) becomes due in a single payment.
Once your loan is assigned to a guaranty agency or the U.S.
Department of Education (Department) for collection, the
following steps may be taken to recover the outstanding balance
due:
Once a loan is declared in default, you are no longer entitled to any deferments or forbearances. In addition, you may not receive any additional Title IV
federal student aid if you are in default on any Title IV student loan until you have made payments of an approved amount for at least six consecutive months. Please see Going Back to School for more information on this topic. To remove your loan from default, please visit the Repaying section of our site for a complete list of repayment options to assist you. |