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Avoiding Default

If you fail to make a payment on time, you are considered delinquent on your loans. If you do not make payments after a period of time (270 days for Direct Loans) you are considered to be in default.

Very few of our students default on their loans and we'd like to help you avoid this situation as well. If you're having trouble repaying your loans, you can contact a financial aid counselor in our office for help. We can help you understand your options and direct you to the Direct Loan Servicer or the UW's Servicer with the right questions to ask.

There are some things you should consider to help prevent going into default on your loans:

  • Borrow as little as possible
  • Understand your options and responsibilities with regard to your loans
  • Keep a list of all your loans, including the lender, type of loan, amount of loan, and the interest rate
  • Notify your lender promptly if you change your name, address, or return to school
  • Contact your loan servicer if you are unable to make your loan payments; you cannot receive a loan deferment or forbearance once your loan is in default
  • Consider a consolidation loan to combine all your educational loans into one loan. This might allow you to extend the term of the loan to reduce your monthly payment

Being in default on your federal student loans has severe and long-lasting consequences, including the following:

  • The Department of Education can immediately demand repayment of the total amount due on the loan
  • The Department of Education or the UW will attempt to collect the debt and may charge you for the costs of collecting
  • The default will be reported to national credit bureaus. Your credit rating will be damaged, which will make it more difficult for you to make purchases such as a car or house
  • You are ineligible for further Title IV student aid
  • You are ineligible for deferments
  • The Internal Revenue Service can withhold your federal income tax refund
  • Your wages may be garnished