Student loan default happens when a borrower fails to make payments on their student loan for a certain period of time as defined in the loans terms of agreement, typically a promissory note. For federal student loans, default requires non-payment for a period of 270 days, while for private student loans, default generally occurs after 120 days of non-payment. Once a loan goes into default, the borrower could face a number of consequences, including wage garnishment, loss of tax refunds or Social Security checks, and a lower credit score.

There are several paths to resolving student loan default, including completing agreed-upon payments, repayment via debt consolidation or other types of loans, discharge via total and permanent disability, and discharge via bankruptcy. Federal student loans can be rehabilitated by making nine consecutive on-time payments within a 10-month period.

It is important to note that defaulting on a student loan can have significant financial consequences for the borrower, including ineligibility to receive more federal financial aid, forced collections practices like tax refund and Social Security benefit confiscation, and paycheck garnishment, as well as associated fees.