Statute of Limitations on Private Student Loans: State Guide

Missing payments on student loans can severely impact your credit. However, the more time that passes, the less of an effect that these missed payments should have on your credit overall.

Additionally, while student loan debt won’t ever go away, there could come a point where your creditors will stop trying to collect on your past-due loans. This limited period that lenders have to take you to court to recoup the debt is called a statute of limitations.

When does private student loan debt fall off your credit report?

While there’s no statute of limitations for federal student loans, a private student loan that has passed the statute of limitations is considered a time-barred debt — meaning the lender can’t sue you to collect the money.

The statute of limitations for private student loans generally ranges from three to 10 years, depending on your state.

Just keep in mind that if you do anything to acknowledge the old debt — even making one payment or acknowledging the debt as yours — the clock can restart, and the statute of limitations will begin again.

Learn More: How to Know if Your Student Loan Interest Rates Too High

Do private student loans go away after seven years?

Private student loans don’t go away unless you pay them off, but in most cases, they’ll fall off your credit report after seven years.

But keep in mind that lenders can still contact you to collect an old debt, even if it’s decades old and they can no longer take you to court over it.

Check Out: What Is a Student Loan Grace Period?

Are private student loans forgiven after 20 years?

Unfortunately, only federal student loans are eligible for student loan forgiveness programs — private student loans don’t qualify.

Tip: While private student loan forgiveness doesn’t exist, there are other options that could help you more easily repay your private student loans.

For example, you might be able to lower your student loan interest rate through refinancing, which could save you money on interest charges and even help you pay off your loan faster.

Learn More: When Student Loan Refi Is a Good Idea and When to Reconsider

State-by-state list of statute of limitations on debt collection

Every state has its own statute of limitations for private student loans and other debts. Here are the statutes of limitations for each of them:

What happens if you default on student loans?

Student loans are considered delinquent immediately after a payment is missed. After missing enough payments in a row, you could end up in student loan default.

Most federal student loans go into default after 270 days. For private student loans, the default terms can vary depending on the loan — many private lenders will consider a loan to be in default after 120 days.

Defaulting on your student loans causing a range of issues, including:

• Repayment acceleration: If your loans are in default, the entire unpaid balance could become due rather than your usual monthly payments.
• Damage to your credit score: Your payment history is one of the biggest factors that make up your credit score. If you miss a student loan payment or miss enough payments to end up in default, your credit score could be severely damaged.
• Limited access to credit in the future: Defaulting on a student loan could make it difficult to get approved for other types of credit, such as auto loans or mortgages. Additionally, being in default on a federal student loan will make you ineligible for federal financial aid.
• Could be sent to collections: Your lender could send your loan to collections, after which debt collectors will start contacting you in an attempt to collect. You might also be charged collection fees, adding to your overall loan cost.
• Could be taken to court: If you default on a private student loan, your lender could take you to court, charge you the unpaid balance, and require you to pay any associated court costs.
• Consequences for your cosigner: A cosigner shares responsibility for the loan — so if you miss payments or end up in default, your cosigner’s credit could be damaged, and they’ll likely be on the hook for repayment.

Can wages be garnished for private student loans?

Yes, your wages can be garnished if you default on private or federal student loans.

• Private student loans: To garnish your wages, private lenders have to sue you and obtain a court judgment. If the wage garnishment is approved, you could have up to 25% of your pay withheld. Lenders might also get a court judgment to seize your assets or place liens on your property.
• Federal student loans: The government can withhold up to 15% of your pay to send to your loan holder.

In general, wage garnishment lasts until your student loan is paid off, settled, discharged, or otherwise removed from default status. In the case of private student loans, you might also be able to ask the court to stop the wage garnishment if you’re eligible for an exemption.

Can you discharge student loans through bankruptcy?

Getting your student loans discharged through bankruptcy is difficult but not impossible. To potentially have your loans discharged, you must:

• File for Chapter 7 or Chapter 13 bankruptcy
• File a separate action called an “adversary proceeding”

The court will then decide whether repaying your student loans would impose an undue hardship on you and your dependents. If the court rules in your favor, then some or all of your student loans could be discharged or modified with different terms — such as a lower interest rate.

Learn More: How to Pay off Student Loans in 10 Years or Less

Should you refinance your student loans to save money?

If you’re struggling to repay your student loans, you might consider refinancing them. Through student loan refinancing, you’ll take out a new loan to pay off your old loans — leaving you with just one loan and payment to manage.

Depending on your credit, you might qualify for a lower interest rate through refinancing, which could save you money on interest and even help you repay the loan faster.

Or you could opt for a longer repayment term to lower your monthly student loan payment and lessen the strain on your budget — though keep in mind that this means you’ll pay more in interest over time.

Keep in mind: While you can refinance both federal and private student loans, refinancing federal student loans will cost you federal benefits and protections — such as access to income-driven repayment plans and student loan forgiveness programs.

If you decide to refinance your student loans, be sure to consider as many lenders as possible to find the right loan for your needs.