What Happens if You Miss a Student Loan Payment?

Realizing you missed a student loan payment can be stressful, but it doesn’t automatically damage your credit score. The consequences largely depend on whether you have federal or private loans, and how long the payment stays overdue. Acting quickly to bring the account current is the best way to minimize credit damage. 

Here’s what happens when you miss a student loan payment and what to do next.

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What happens when you miss a student loan payment?

Missing a student loan payment makes your account delinquent. What happens next depends largely on your loan type. 

For federal student loans, your loan remains delinquent until you catch up on payments or make another arrangement with your servicer. Once your payment is 90 days past due, your servicer can report the delinquency to the major credit bureaus. If you go 270 days without making a required payment, your loan enters default.

For private student loans, the timeline can move faster and varies by lender. You may be charged a late fee soon after missing a payment, and some lenders may report a delinquent payment to the credit bureaus once it's 30 days past due. Private lenders also set their own rules for when a loan goes into default.

How does a missed payment affect your credit score?

Missing a payment won’t negatively impact your credit score right away, especially if you catch it quickly (usually within 30 days). The bigger risk comes when the payment stays past due long enough to appear on your credit reports.

Once a late payment is reported, it can lower your credit score. Payment history makes up 35% of your FICO score, so missed payments can have a significant impact. The damage can become more serious if you continue missing payments and the loan eventually goes into default.

What's the difference between delinquency and default?

Delinquency begins when you miss a student loan payment. Default happens after the loan remains delinquent for an extended period. For most federal student loans, default occurs after 270 days without a required payment. Private lenders set their own default timelines, which you can find in your loan agreement.

Default has more serious consequences than delinquency. Your full loan balance may become immediately due, and the debt could be sent to collections. If you default on federal student loans, the government may also garnish your wages or withhold certain federal payments, including tax refunds. A default can remain on your credit reports for up to seven years and make it harder to qualify for new credit, such as a mortgage, personal loan, or credit card.

How can you catch up on a missed payment?

If you can afford to catch up, paying the overdue amount is the fastest way to bring your account current. It won’t remove a late payment that has already been reported to the credit bureaus, but it can prevent you from falling further behind.

“If you’re only a few days or a week late and you’ve only missed one payment, make your payment and set a reminder for yourself to get back on track with your payments moving forward,” recommends Leslie Tayne, Esq., a debt relief attorney at Tayne Law Group, P.C. 

“If you’re more than a month behind, I recommend calling your student loan servicer and explaining your situation,” advises Tayne. “It’s the servicer's job to inform you of your options and assist in finding a repayment plan that works for you.”

If you can’t afford to catch up right away, ask your servicer about ways to lower or temporarily pause your payments. Federal student loan borrowers may have options such as deferment, forbearance, or an income-driven repayment plan. Here’s how they compare:

How can you avoid missing future payments?

A few simple habits can make it easier to stay on top of your student loan payments:

• Enroll in autopay: With autopay, your servicer withdraws the payment directly from your bank account each month. Many lenders offer an interest rate reduction for setting up automatic payments. 
• Set payment reminders: Add your payment due date to your calendar and confirm the payment is processed each month.
• Keep your contact information up to date: Make sure your servicer has your current email address, phone number, and mailing address on file so you receive important account notices. 
• Choose an affordable repayment plan: If your federal loan payment is too high, enrolling in an IDR plan may help reduce it. 
• Contact your servicer early: If you think you may miss a payment, contact your loan servicer to learn about your options before the account becomes delinquent.