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How to recover from a student loan default

College • March 11, 2019 • Reyna Gobel


What you’ll learn

  • How to check if a loan went into default
  • How to remove a default from your credit report


When I returned to school in 2004, I wasn’t able to get new federal student loans. One of the 16 student loans I had borrowed as an undergrad wasn’t included in my student loan consolidation and went into default because I didn’t know it existed.

I was able to get an affordable repayment plan to get out of default. I returned to school with new student loans 6 months later and got the default removed from my credit report in a year’s time.

Here’s what you can learn from my student loan default story.

  1. Keep track of all your loans

    I could have avoided my situation if I’d logged in and checked on the status of my federal student loans. You’ll be able to see the status of all your federal loans at studentloans.gov and can see if any of them are in default.

    Make sure federal student loan payment breaks such as deferment and forbearance are properly recorded. If there are any errors, contact the student loan servicer in charge of that particular loan. If you are in default, contact the guaranty agency that administers your loan and collects from borrowers.

    You can also log in to your account with your private lender, to check on the status of your private student loans.

  2. Get on a Default Rehabilitation Plan ASAP

    There is an income-driven plan for paying off federal student loans in default. The rehabilitation plan for default allows you make payments based on income. After a number of monthly, on-time payments, your loan will be out of default. Then you can get on a regular income-driven repayment plan, or any other plan you choose. At this point, the default can be removed from your credit report, however it will still show late payments that were reported by your servicer before the loan went into default.

  3. Review your credit reports

    You’re allowed three free credit reports annually—one from Equifax, one from Experian, and one from TransUnion. On these reports, you can see all your loans and debt, whether you have federal student loans, private student loans, or both. This is a good time to not only check on the status of your loans, but to make sure everything on your report is accurate. If you are cleared from a federal student loan default, you’ll need to check your report to make sure the default did drop off your credit report about 60 days later.

Avoid default whenever possible

Remember the old childhood phrase, “Are we there yet?” This is one time you don’t want to be. Avoid penalties like an impacted credit report by taking proactive action before a default occurs.

Don’t hide from your federal or private student loans. Ask about repayment plan possibilities.


Reyna Gobel is a journalist, author, professional speaker, and educator who's been quoted by Money Magazine, Real Simple, and The Washington Post. She’s spoken at hundreds of colleges across the country about student debt—and she’s the author of "CliffsNotes Graduation Debt" and “CliffsNotes Parents’ Guide to Paying for College and Repaying Student Loans.”


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Sallie Mae does not provide financial, tax, or legal advice and the information contained in this article does not constitute tax, legal, or financial advice. Sallie Mae does not make any claims, promises, or guarantees about the accuracy, completeness, or adequacy of the information contained in this article. Readers should consult their own attorneys or other tax advisors regarding any financial strategies mentioned in this article. These materials are for informational purposes only and do not necessarily reflect the views or endorsement of Sallie Mae.