Policy - Federal Loan Default

Students who have an active federal loan default on their record are not eligible to receive further financial assistance until they have resolved the issue with the holder of that loan. Once satisfactory payment arrangements have been made with the loan provider, a letter from them to this office must be submitted and we will be able to clear the requirement from the student’s record and proceed with the processing of the financial aid application. Keep in mind students who have multiple loans with different lenders in default, must resolve each default. The status of loans can be checked on the National Student Loan Data System (NSLDS) at http://www.nslds.ed.gov. If a loan provider has already alerted NSLDS and the default is cleared from the student’s record on that system, the student can request we satisfy the requirement by checking the database instead of waiting for the letter from the loan holder. However, since the wait time between clearing the loan default and the updating of NSLDS can take several weeks, it is normally faster to submit the requested letter.

Defaults can be resolved through your lender by:

  • Paying the loan in full
  • Consolidating the loan
  • Making six consecutive, full, on-time voluntary payments
  • Rehabilitating the loan