If you're having trouble making your loan payments, you have options.

You're responsible for repaying your student loans.

Miss one payment and you are considered delinquent. Continue to miss payments and you could go into default. If you're having trouble making your loan payments, consider other payment options.

Borrower payment options

• Lower your payments by changing your payment plan.
• Apply for deferment or forbearance if you can't pay.
• Consider loan consolidation to lower your monthly payments.

Act early to avoid becoming delinquent on your loan and going into default.

Delinquency

Delinquency is when you fail to make your monthly loan payments on time. You are considered to be delinquent when you miss even one payment.

All of your payments for student loans (and credit cards) are listed on your credit report. So, aside from late fees, your delinquencies could be reported to the national credit bureaus as negative effects on your record. These delinquencies could have a negative impact when you apply for future loans to buy a house or a car.

And if you miss any more payments, you could very easily slip into default.

Default

Default is the failure to pay back your student loan. For a Stafford loan, if you miss nine months of payments, you have defaulted.

Loan default can have long-lasting or permanent consequences. If you are delinquent and default on your loans:

• Your wages can be garnished.
• Your IRS tax refunds can be seized by the U.S. Department of Education.
• You can be sued for the balance of your loan.
• You can lose many loan benefits, such as Cash BackSM or lower interest rate incentives.
• You can lose your eligibility for future financial aid.
• You can lose deferment and forbearance options.
• You can lose many repayment options, such as income-sensitive or graduated repayment.
• The cost of your loan can increase with the addition of late fees and collection costs.
• Your default can be reported to all national credit bureaus and could impact financing of any future purchase, such as a home or car.

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