What does default on a student loan mean?
When a borrower is 270 days or more delinquent in making payments on his or her student loan, the borrower is considered to be in default. Once a borrower is in default, the lender may file a default claim with the guarantor of the loan. Provided that the lender has met applicable federal servicing requirements, the guarantor will pay the lender for the default claim. Once the guarantor has paid the lender’s default claim, the guarantor becomes the holder of the loan and is responsible for collecting on the loan on behalf of the federal government.
