Credit glossary
Student loan default
The status a federal Direct Loan reaches after 270 days of missed payments, which brings collection actions and serious credit damage.
Federal regulations define default on a Direct Loan as a failure to pay for 270 days. Before that, servicers report delinquency once a payment is 90 days past due. FICO's August 2026 report found borrowers with a recent student loan delinquency lost an average of 38 points. In default, the government can use wage garnishment and Treasury offset, though the Education Department announced a delay of those in January 2026.
There are three exits: rehabilitation, consolidation or paying in full. Rehabilitation takes 9 on-time payments within 10 months, and once it's done the Education Department asks the bureaus to remove the default notation, though the earlier late payments stay. A second rehabilitation becomes available from July 1, 2027. Consolidation can be faster but carries no similar removal rule.
Guides that go deeper
- Getting out of student loan default: rehabilitation vs. consolidationHow federal student loan rehabilitation and consolidation work, which one removes the default from your credit report, and where collections stand in 2026.
- Student loan delinquency and your credit in 2026: what's reportedFederal student loan late payments hit credit reports again in 2025. How the 90-day rule works, how big the score drops were, and how to get out.
Sources
- 34 CFR 685.102 (definition of default), eCFR
- 34 CFR 685.211, Miscellaneous repayment provisions (loan rehabilitation), eCFR
- 20 U.S. Code 1078-6, Default reduction program, Cornell Law School LII
- U.S. Department of Education Delays Involuntary Collections Amid Ongoing Student Loan Repayment Improvements, U.S. Department of Education
- FICO Score Credit Insights Report: Average FICO Score Holds Steady at 714 as Consumers Show Resilience (Aug. 25, 2026), FICO via Business Wire
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