How to Deal With a Late Student Loan Payment

late student loan payment

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Keeping up with student loan payments can be tough, especially if you’re working with a limited income. Although most loan servicers will give you 15 to 30 days to make up a late student loan payment, you don’t want your bills to go unpaid for long. If they do, your student loans could end up in delinquency or worse, default.

Here’s what to know about late student loan payments, including how to get current on your debt and avoid falling behind in the first place.

What is a late student loan payment?

When you have student loans, you usually have to make payments once per month. If you don’t pay your bill by its due date, your student loan payment is considered late.

But most lenders will give you 15 to 30 days to make up your payment. If you have federal Direct loans, for instance, you have 30 days to make it up. If you have FFEL loans, you have 15 days.

The rules around private student loans vary from lender to lender, but many will give you 15 days to get your payment in. You can make a payment via mail or through your online account.

What happens if you miss payments?

If you don’t make up your late student loan payment, your loan will be considered delinquent. A delinquent debt can seriously hurt your credit score.

The federal government will report your student loan delinquency to the credit bureaus after 90 days. A private lender could report it much sooner.

Even if you get current on your debt, this late payment could stay on your credit report for a long time dragging down your score. So it’s best to make your payment ASAP before the credit bureaus find out about it.

Plus your lender might charge late fees on your loans. A typical late fee on a federal student loan is 6% of your payment. So if your monthly payment is $350, it will increase to $371.

The late fees on private loans vary, with some lenders charging higher fees and others charging none at all. If you want to find out about the late fees for your private student loan, contact your loan servicer.

Delinquency could lead to default

If you miss payments on your federal student loans for 270 days, they’re considered to be in default.

Once they’re in default, you can’t simply start paying again to get them back into good standing. Instead, you’ll need to go through a process of consolidation or rehabilitation. Private loans can be considered in default much earlier.

The consequences of federal student loan default are severe, and they can include garnishment of your wages, tax refund, or even Social Security benefits. Private loan default is also bad news, since a private lender can bring you to court and sue you for payment.

Plus, your loan could get sold to a debt collector, and you’ll have to pay additional hefty fees. Defaulting on student loans is a stressful situation with a host of bad consequences, so you want to do everything you can to avoid it.

How to get your student loans back into good standing

As long as your loans haven’t gone into default, you can get them back into good standing simply by making a payment. If you can’t afford to do so, speak with your loan servicer about your options.

For federal student loans, for instance, you could ease the burden of repayment by adjusting payments on an income-driven repayment plan or pausing payments completely through deferment or forbearance.

Some private lenders also let you pause payments through forbearance or even skip a payment every once in a while. Speak with your lender to find out about your options and take steps to revive your delinquent student loans.

Tips for avoiding late student loan payments

One of the best ways to avoid a late student loan payment is to set up auto-pay on your account. With auto-pay, the loan servicer will automatically deduct your payment from your bank account on the due date each month.

You can set it and forget it, and you’ll likely also get a 0.25% interest rate discount for using auto-pay. You can easily set this up in your online account.

If you’re worried about over-drawing on your account, you might prefer to make manual payments. In this case, you’ll need to take a hard look at your budget to figure out how to afford student loan payments.

You might ask if you can change the due date of your bill so that it falls right after you receive a paycheck from work. And again, if you can’t afford payments, inquire about an income-driven repayment plan, deferment, or forbearance.

By taking these proactive steps to manage your student loan payments, you can avoid falling behind and aggravating an already difficult situation.

Feeling overwhelmed by your student loans? Here are six steps you can take today to get your debt under control.

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