What happens if I miss a student loan payment?

If a borrower misses a student loan payment, there can be several consequences. Initially, the borrower may incur late fees, which vary depending on the loan agreement. More importantly, missing a payment can negatively impact the borrower's credit score. Lenders typically report missed payments to credit reporting agencies after they are thirty days late, which can affect the borrower’s credit history and make future borrowing more difficult. If the payment is not made for an extended period, the loan may enter default, which is generally defined as failing to make a payment for 270 days or more. Defaulting on a loan can lead to serious repercussions, including the acceleration of the loan balance, meaning the entire amount becomes due immediately. Additionally, the borrower may lose eligibility for deferment or forbearance options, and the loan may be sent to collections. Borrowers experiencing financial hardship should explore options such as deferment or income-driven repayment plans, as these can offer temporary relief from standard payment obligations. For more specific information, it is beneficial to look on the Great Lakes Higher Education Corp. website or review the loan agreement for details on the terms and conditions related to missed payments.