If you’re one of the many borrowers who have fallen behind on federal student loan payments after the on-ramp period ended on Sept. 30, 2024, it’s crucial to take action immediately to avoid defaulting in July or August.
Once your payments are 270 days past due, your student loans will default, leading to serious consequences such as wage garnishment, damaged credit, and loss of access to affordable repayment plans.
According to Department of Education data, nearly 5.6 million borrowers were between 91 and 180 days behind on their payments as of March 31, putting them at immediate risk of default this summer. Additionally, five million borrowers were already facing default penalties in May.
With approximately 10 million borrowers at risk of default this summer, it’s essential to act promptly to avoid default and seek assistance to lower your monthly payment or pause payments as needed.
In the current challenging financial environment, understanding your options is crucial. Checking all your student loan accounts, identifying your servicer(s), and exploring income-driven or alternative repayment plans are important steps to take.
If you’re enrolled in a deferment, forbearance, or the SAVE plan, you may already be protected from default, but it’s recommended to verify your status with your loan servicer.
It’s important to act swiftly and consider options like income-driven repayment plans, forbearance, deferment, or alternative repayment plans to avoid default and manage your student loan debt effectively.
Check all of your student loan accounts
Start by logging into all your federal student loan accounts and identifying your servicer(s). Verify your loan repayment status and last payment date to ensure you are up to date with payments.
If you’re delinquent, your servicer should be in touch with you about missed payments. Ensure your contact information is updated in your account to receive notifications.
Servicers typically contact delinquent borrowers by phone, email, and mail after 30 days of missed payments. If you’re unsure about the source of calls, verify your servicer’s official phone number and reach out directly.
Understanding your options and taking proactive steps can help you avoid default and manage your student loan debt effectively.