Understanding Delinquency and Default

Student loans, both federal and private, must be repaid, even if your financial situation becomes difficult. Your student loans cannot be cancelled if you didn’t get the education or job you expected, or if you did not complete your education.

If you fail to repay on time, you are delinquent.  If you continue to be delinquent, you're in default -- and your entire loan balance comes due.

Managing your student loan account, keeping good records and developing a sound—and realistic—financial plan will help you stay on track and avoid default. 


The first day you miss a payment, you are delinquent. If you do not bring your payments current and remain delinquent for 90 days, your loan servicer will report your delinquency to each of the three nationwide consumer reporting companies. A negative credit rating may make it difficult for you to:

  • Rent an apartment
  • Get a car loan
  • Sign up for utilities
  • Get a credit card
  • Get a cellphone plan
  • Get a job

Learn more about credit reports, and request a free copy of your report.

If you have problems making your monthly loan payments, don't panic. There are several options to help you avoid defaulting on your student loan, including deferments, forbearances and loan consolidation. But you must act before the loan defaults. 

  • Having difficulty managing your FFEL loan serviced by HESC? Don’t wait! Contact HESC's Delinquency Resolution Team at 1-800-888-0741 or This email address is being protected from spambots. You need JavaScript enabled to view it..


A student loan is defaulted when you fail to make your scheduled payments or make special arrangements with your lender or servicer to suspend payments according to the terms of your promissory note.

Your loan enters default when you have failed to repay your loan for more than 270 days. Your lender will then sell your loan to the agency that guaranteed it, such as HESC, or the U.S. Department of Education (ED).

Defaulting on your loan is serious and has many consequences.

However, you can get out of default and repair the damage to your finances.

Administrative Review

When your student loan is placed in default, you have the right to a review.

If you believe a mistake has been made with your FFEL program loan which caused the default, you can ask HESC for an Administrative Review.

  • When HESC buys your loan from the bank, they send you a letter explaining the default process and offering you the opportunity to enter a repayment agreement.
  • This letter also includes an application for an administrative review.
  • If your written request for review is received within 60 days from the date of the letter, HESC won't report the default to collection bureaus or add collection charges to your loan until the review process is over.

If you’re having trouble repaying or are in default on your loan, HESC will work with you to assess your situation and help you enter a satisfactory repayment agreement.

For details, call 1-866-991-HESC (4372).