Default is the failure to repay a loan as agreed. In most cases, a delinquent federal student loan is considered to be in default when it is 270 or more days past due. Once a loan is in default, there can be severe consequences, including a collections fee of anywhere from 18-40% on the outstanding balance of the loan. Other consequences can include wage garnishment, tax offsets, ineligibility for future federal financial aid, ineligibility for deferment, loss of subsidized interest benefits, a negative impact on your credit score for up to 7 years and other serious legal consequences.
Student Debt Manager can help you identify ways to avoid default or recover from default.