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What happens if you don't pay student loans?

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by Hailey Young
November 28, 2022
6 min read
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When you’re on a tight budget, keeping up with the payments on your student loans can be extremely difficult, especially when student loan payments seem to be endless.

If you are worried that you can't pay for student loans, the best option is to accept federal student aid like scholarships and grants first. Private scholarships are also a great option to avoid student debt.

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If you need to take out student loans, though, or if you have already taken out a loan, you may be wondering if you can keep up with the payments. If you are considering whether you can skip your monthly payment on your student loan, you should be aware of what could happen if you don’t pay your student loans.

What happens if you don't pay federal student loans?

Since your loans are owned by the government, your loan servicer can do many things to make you pay your student loans.

For federal subsidized or unsubsidized student loans, you have a six-month grace period after you graduate. Grad PLUS and Parent PLUS loans don’t have grace periods, but you can elect to defer your payments until six months after graduation. Once the six months are up, you will have to start making payments on your loans according to the repayment schedule in your loan agreement.

If your payment is 30 days late, your loan servicer will charge you a late fee. The fee can be as high as 6% of your late payment amount. If your payment is 90 days late, the loan servicer will report the delinquency to the major credit bureaus. Your loans will enter into default if you don’t make payments for 270 days or more.

What happens when you default on federal student loans?

When you default on your federal student loan payments, the entire outstanding balance of your student loans becomes due, including interest. The loan servicer can then send your account to a collections agency which will try aggressively to collect the amount owed, and you will also have to pay collections fees.

A default status means you are no longer eligible for further financial aid, federal loan relief programs, mortgages, or car loans. The government can also withhold tax refunds or Social Security payments and apply them to the amount owed.

Additionally, the government can contact your employer and have them withhold a portion of your paycheck to repay your loans. If you’re still in college, your school can withhold your transcripts, making it impossible to verify your progress or transfer to another school. The government can also take you to court, and you may have to pay court and lawyer fees.

What happens if you don't pay private student loans?

While some private loan lenders give borrowers grace periods, most private lenders require you to make payments right after you graduate.

One day after your payment due date, your lender will mark your account as delinquent and report the delinquency to the credit bureaus. If your payment is 90 days late, the lender will consider you to be in default.

What happens when you default on private student loans?

Private student loan lenders don’t have the same methods of collecting on defaulted loans as the federal government, but the consequences can still be damaging.

Once you default, your default status will be reported to the credit bureaus, which can significantly damage your credit. Most private lenders charge late fees. Typically, the fees are 5% of the past due amount. They may also hire a collections agency or take you to court in order to collect your payments.

If your payment is 120 days late, the lender will sell the debt to a collections agency that will handle the loan going forward.

Will unpaid student loans ever go away?

The government can forgive student loan debt, but if you miss student loan payments, it can make it more difficult for them to go away.

After at least 20 years of student loan payments under an income-driven repayment plan, your undergraduate student loan debt will be forgiven. For graduate school students, your student loan debt can be completely forgiven after 25 years.

Physical inability to pay loans may also affect your student loan status. When you die, when a parent dies, or when you suffer a severe and permanent mental or physical disability that prevents you from working, you may be able to have your student loans discharged. Your loans can also be discharged if you file for student loan bankruptcy and prove that repaying your debt would cause you and your dependents undue hardship.

Sometimes, the career or school that you choose can cause your loans to be forgiven. If you can keep up with 120 qualifying monthly payments of a repayment plan while working full-time in public service after 10 years, you can get Public Service Loan Forgiveness. When you teach for five consecutive years in a Title I school district, your student loan payments are also forgiven. If you attended a school that acted fraudulently (e.g., using falsified placement rates, deceptive marketing, and predatory recruiting), you can also have your loans written off.

Read our ultimate guide to student loan forgiveness here.

What happens if you don't pay your student loans in 10 years?

After 10 years or even after one day of not paying your student loans, you can deal with additional fees, lawsuits, and a lowered credit score. You can lose your eligibility for federal loan relief programs, financial aid, mortgages, or car loans.

With federal loans, the government can contact your employer and have them withhold a portion of your paycheck to repay your loans. If you’re still in college, your school can also withhold your transcripts.

If you cannot pay off your loans, make sure that you find a new method of student loan payment before you go into default status.

At what age do student loans get written off?

There is no specific age when students get their loans written off in the United States, but federal undergraduate loans are forgiven after 20 years, and federal graduate school loans are forgiven after 25 years. You can also get your student loans written off in the case of death, bankruptcy, disability, or in the case of fraudulent behavior at your college or university.

There are also plenty of forgiveness programs like Public Service Loan Forgiveness which reward people in certain fields. If you are interested in a career in public service or if you are interested in working in a Title I school, you may be able to get your student loans written off before the 20 or 25 years is up.

Browse these grants to pay off student loans today to get a hold on your student loan debt.

Frequently asked questions about paying student loans

How can I get out of paying student loans?

If you can’t afford your federal student loans, you can get your loans forgiven or discharged.

If you can't find a way to get out of paying federal student loans, though, you can manage your student loan payments by enrolling in an alternative payment plan. Income-driven repayment (IDR) plans base your monthly payments on your family size, discretionary income, and a longer repayment term. This way, your

If you can’t afford your payments because you lost your job, became ill, or have another financial crisis, you can use a forbearance or deferment to temporarily postpone your payments. A forbearance can last up to three years.

While private student loan lenders usually don’t have alternative payment options, you can work with your lender to lessen your monthly payments.

Do student loans affect your credit score?

Yes, if you don't pay your student loan payment and go into default, it can be written in your credit report, which can significantly damage your credit score. Be careful relying too heavily on student loans because it can have a dire impact to your future financial career.

Intrigued to learn more? Check out's blog page to read about everything you need to know regarding college including student credit cards, student loans, scholarships, and much more.

Hailey Young

About Hailey

Hailey is adept at writing about financial aid and scholarships. Hailey has spent the majority of her high school and college career crafting her writing skills. In high school, Hailey’s writing experience included writing for her school’s yearbook as well as writing some articles for Redefy, an international non-profit whose goals are to fight stereotypes and promote positive perspectives. Hailey began studying Literary Arts and Africana Studies at Brown University after high school. In her studies, she has taken a variety of writing workshops that have helped her hone her craft as a writer. She will earn her bachelor's degree, which includes an honors degree in Creative Writing from Brown. 

Hailey is also passionate about scholarships and financial aid, as she was a scholarship recipient through high school and college. Through the generosity of others, Hailey has been able to receive a quality education and would love to pass this gift on to others. As a current senior in college, Hailey has become well-versed in the ins and outs of scholarships, student debt, and college spending. With this experience and knowledge, she is readily prepared to help others as a Content Writer for 

Hailey is no longer with the Writing Team, but we continue to value and appreciate her contributions.

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