Past-Due Loans
Get Help – Avoid Default

If you can’t make your student loan payment, the most important step for you to take is to ask for help – immediately – from one of the following organizations:

  • Your lender or loan servicer.
  • Your loan guarantor.
  • Your school’s financial aid department.

You have several options for resolving your payment problems, including:

Consequences of Loan Default

Your credit rating suffers. Your guarantor is required to notify national credit bureaus of your default. This notification will harm your credit rating and likely will make it difficult for you to obtain other types of consumer credit, such as a home mortgage or a car loan.

Your wages may be garnished. Your guarantor can notify your employer to withhold a portion of your pay, which will be applied to your unpaid balance.

You will incur additional costs. Collection costs of up to 24 percent of your outstanding balance may be added to your account when you default. In addition, interest continues to accrue. For example, if you default on $5,000 in student loans and fail to make a payment for two years, at the end of that period, the balance that you owe could grow to more than $7,000, including collection costs and additional interest.

Your income tax refunds may be seized. If you are due a federal income tax refund or other federal payment, that payment may be seized to satisfy the outstanding balance that you owe. In addition, some state governments also seize state tax refunds or benefit payments due defaulted borrowers.

Getting Help with Past-Due Loans

Contact your lender or servicer, the organization to which you’re supposed to make your payments. If you don’t know who your servicer is, use the National Student Loan Data System website to get the information.

Student Assistance Corporation works on behalf of USA Funds to help keep borrowers who encounter loan payment problems out of default.


USA Funds Loan SolutionsSM is a website that allows you to view information about your USA Funds loans, including:

  • The name and contact information for your lender or loan servicer.
  • Your payment history.
  • Resources to help you apply for loan payment relief.

If you have a dispute with schools, lenders or guarantors regarding a federal education loan, and have been unable to resolve the dispute, contact:

  • U.S. Department of Education’s Federal Student Aid Ombudsman’s office: (877) 557-2575.

Federal student loans allow you flexible repayment options. USA Funds makes understanding those options easy: