Loan Default
Default occurs after 270 days of nonpayment on a federal student loan or 120 days of nonpayment on an alternative (private) loan.
If You Want to Avoid Default
If you have missed payments on your student loan but want to avoid default, please contact Default Prevention Services at 1-800-328-0355. Representatives are available to assist you:
- Monday through Thursday—8:00 AM to 9:00 PM (ET)
- Friday—8:00 AM to 7:00 PM (ET)
- Saturday—8:00 AM to noon (ET)
Although one missed payment does not equal default, it does appear on your credit history and may affect your ability to obtain credit in the future.
If You Are Already in Default
The Defaulted Loan Rehabilitation Program allows student loan borrowers who have established satisfactory repayment after default to remove the defaulted status completely from their AES-guaranteed loan account and credit report.
Benefits
- Your rehabilitated loan will be eligible for future deferments and forbearances. Knowing these options may help you avoid a future default during periods of financial hardship.
- You will be eligible for future student aid if you wish to return to school.
How it Works
A representative from Default Collections will establish a monthly repayment plan for you and must approve the monthly payment amount required to participate in this 10-month program.
- Payments must be voluntary Payments received through garnishment or federal offset do not qualify.
- You must make at least nine payments within 20 days of your assigned due dates over 10 consecutive months.
- You cannot pay a lump sum amount or make double payments to qualify sooner in the 10-month period. Remember that you are demonstrating the ability to make your monthly payments after removal of the default status from your loan.
- You must make timely payments until you receive your Rehabilitation Approval Notice. Contact us immediately if you have any questions regarding whether or not you should make a payment.
- You must have a minimum principal and interest balance of $500 at the time of rehabilitation (after you make your nine payments).
Once you complete the rehabilitation process, AES will be the servicer of your rehabilitated account.
To Qualify
To determine your eligibility for this program and to establish a monthly repayment plan, contact us at 1-800-233-0751. Representatives are available to assist you:
- Monday through Thursday—8:00 AM to 9:00 PM (ET)
- Friday—8:00 AM to 5:00 PM (ET)
- Saturday—8:00 AM to noon (ET)