How to Fix Defaulted Student Loans

A student loan that goes into default occurs when no payment has been made on the account for more than 270 days, and can dramatically lower your credit score. Once the student loan defaults, it goes into collection, where you face wage garnishment. To fix a defaulted student loan, you must contact the lender or collection agency to set up a payment plan or new loan.

Instructions

1

Make monthly payments on time. According to Bankrate, nine to 12 consecutive payments are required to remove the default status from your credit report.

2

Contact the lender and set up automatic payments from your checking account or debit card to prevent a missed payment. The goal is to show the lender that you are honoring your promise to pay off the loan as agreed.

3

Consolidate the loan. After paying on the loan for three consecutive months, you are given the option to consolidate the loan, which lowers the monthly payment amount but lengthens the repayment schedule.