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Defaulting on a student loan, such as a Federal Stafford or Perkins Loan, can have any number of negative impacts on your life. It may inhibit your ability to receive further financial aid and so block your academic progress here at UCLA. Credit bureaus report monthly on each student loan borrower’s payment habits. Because of our society’s general reliance on credit reporting and background checks, a report of a delinquent or defaulted student loan can have potentially adverse effects on your ability to borrow money or obtain some types of employment.
What exactly is default? Federal regulations governing student loans define default as “the failure of a borrower to make an installment payment due or to comply with other terms of the promissory note or written repayment agreement.”
For the purposes of this guide, let us consider a Stafford or a Perkins Loan that is delinquent with at least one payment thirty or more days late. Three such scenarios are outlined below. The last scenario is the most serious though all three require an immediate action on your part to rectify the situation and mitigate, if not repair, damage to your credit as well as your future ability to receive federal financial aid.
You can no longer just catch up on missed payments, nor can you ask for deferment or forbearance. The entire balance of the loan plus interest and collection costs are due. What can you do?
Remember that this is a general guide. We strongly recommended that you communicate directly with your lender regarding your rights and obligations under the terms of your Stafford or Perkins Loan.