manage debt | credit cards and a pen

Learn How Long Student Loans Appear on Credit Reports

Credit Score Report History

Highlights

  • Federal law controls the behavior of credit bureaus.
  • Federal student loans can be reported indefinitely.
  • Private student loans follow conventional rules for delinquent debt.
4.5
/5.0
(7 Votes)

Learn When Delinquent Student Loans Will Disappear From Your Credit Report

Current and delinquent student loans appear on borrowers’ credit reports. How long a delinquent student loan will appear on a credit report depends on whether the loan is private or federal. Federal law controls how long a derogatory, the term used to describe a negative mark, can appear on a credit report. Let us start by reviewing the rules for credit reports.

Credit Report Rules

Federal law (US Code Title 15, §1681c) controls the behavior of credit reporting agencies (CRAs). The specific law is called the Fair Credit Reporting Act (FCRA). Under FCRA §605 (a) and (b), an account in collection will appear on a consumer’s credit report for up to 7½ years. To determine when an account will be removed by the CRAs (TransUnion, Equifax, and Experian and others), add 7 years to the date of first delinquency. The date of first delinquency is shown in credit reports. Subsequent activity, such as resolving the debt or one debt collector selling the debt to another collector, is irrelevant to the 7-year rule.

Some debts have a reporting period longer than 7 years, including:

  • Tax liens: 10 years if unpaid, or 7 years from the payment date
  • Bankruptcy: 10 years from the date of filing (15 U.S.C. §1681c)
  • Perkins student loans: Until paid in full (20 U.S.C. §1087cc(c)(3))
  • Direct and FFEL loans: 7 years from default or rehabilitation date (20 U.S.C. §1080a(f)(1) and 20 U.S.C. §1087e(a)(1))
  • Judgments: 7 years or the debtor’s state statute of limitations on judgments, whichever is longer

The FCRA 7-year rule is separate from state statutes of limitations for debt issues. Learn the lifespan of a judgment in your state at the Bills.com Statute of Limitations Laws by State page.

The start of the 7-year clock begins at the date of first delinquency, or if no payments are made, when the first payment was due. Review your credit report carefully to make certain the dates of first delinquency are reported correctly. Unscrupulous collection agents reset the date of first delinquency to stretch out how long a derogatory account appears on consumer’s credit report. This is illegal under the FCRA.

Just because a debt does not appear on a credit report does not mean the statute of limitations for the debt has passed. The opposite is also true: The passing of a state statute of limitations on a debt does not mean the debt may not appear on a credit report. The federal FCRA and state statutes of limitations are separate and independent of each other.

Whether a debt appears on a credit report does not establish legal liability for the debt. The opposite is also true: You may have legal liability for a debt not reported to the credit reporting agencies. Credit reports are not legal records of every debt a person owes.

Get a no-cost, no obligation analysis of your debt options from a pre-screened debt relief provider.

Private Student Loans & Credit Reports

Private student loans are treated no differently from other private debt. As mentioned above, the 7½-year rule applies to private student loan debt.

If you have a derogatory relating to a student loan, review your credit reports to verify accuracy of the date of last payment and date of default. Do this for reports generated by three reports credit reporting agencies. You can obtain a free copy of your credit report from each credit bureau once every 12 months by visiting AnnualCreditReport.com. You can also purchase a copy of your credit report from the credit reporting agencies if you would like to review your report more often.

Check the Dept. of Education’s National Student Loan Data System (NSLDS) to see if the loan is federal. State statutes of limitations do not apply to federal loans, and are subject to collection indefinitely. Student loans not backed by federal grants or guarantees do not appear in the NSLDS, and are therefore private. Private student loans are subject to state statutes of limitations.

A private student loan falling off a credit report will not cancel the debt or make it uncollectable. Also, the date a debt falls off a credit report has no relationship to a state’s statute of limitations. See the Bills.com resource Private Student Loan Settlement to learn strategies for resolving private student loans.

Federal Student Loan Rehabilitation & Credit Reports

Delinquent federal student loans can be reported indefinitely, i.e., for as long as they are delinquent. For federal student loans, the Dept. of Education will continue its collection efforts until the loan is paid. If your student loan is federal, consider rehabilitating your loan, which should allow you to resume payments on the loan and have the default removed from your credit report. The Dept. of Education may also offer other options to help you repay your loan at a rate you can afford. Contact the Dept. of Education’s collections office to discuss the repayment options available to you.

If you fail to resolve your student loan obligations, the Dept. of Education may garnish your wages, levy your bank or credit union accounts, or place a lien on your property. If you cannot afford to make payments, or do not wish to do so, consult with an attorney in your state to discuss the risks associated with your unpaid student loan.

4.5
/5.0
(7 Votes)

58 Comments

Recent Best
1500 characters remaining
  • SM
    Jun, 2014
    Shauna
    My husband and I recently looked into applying for a VA home loan. We pulled our credit reports and met with a representative. My husband has 3 separate Sallie Mae loans from 2001 and 2002 that went into default (over 120 days). In 2008 I became aware of this and found out that the debt was sold/transferred to AES and that is with whom we have set up payments will and will have the debt paid off. However Sallie Mae is showing on the report as "claim filed with gov't". Because of this we can't proceed with a VA loan and were advised to have the info corrected. Can or will Sallie Mae unfile a claim or fix this since the loan was taken over and is being paid off?
    0 Votes

    • BA
      Jun, 2014
      Bill
      I can't say whether or not Sallie Mae will comply with your very reasonable request, but you should contact them and try to get them to update the credit report. If they are not willing to do that, ask your lender's underwriter if there is language that Sallie Mae could put into a letter that would satisfy him/her and allow the loan to go forward.
      0 Votes

  • CS
    Jun, 2014
    Chris
    I defaulted on a Federal loan in 2004. I landed a really well paying job and garnishment of my wages began. Each time I've communicated with the collection agency, they've tried to force me into the rehab program saying that's the only way to remove it from my credit (which is in the mid 700's.) The "catch" is that when returned, all penalties and collection fees are locked in forever. However, if you just pay off your balance most of the collection costs are removed. I recently found that my credit score is untouchable since I've made it past the 7 years. After discovering this will do nothing for my credit score I told them I wanted to do a lump sum payoff. They immediately stopped calling… Over the past 2 weeks, I’ve called them 3 times asking for a number and it’s a run around every time. They want to know “how much I’m offering,” I tell them whatever I owe. Then they want to know the exact date I intend to pay “because they can’t tell me without calculating the interest to that day.” Then they said they have to get that exact number from the Department of Ed… That is false – they have the authority. And of course the credit damage scare tactics to close out the conversation. I suppose I’ll have to get an attorney at this point. Point is, look at all of your options before rehab – and I know I’m probably a rare case. It seems that their golden ticket is to get you into the loan rehab thus locking in the maximum amount that they can collect.
    0 Votes

    • BA
      Jun, 2014
      Bill
      Thank you for sharing your experience and good advice, Chris. Instead of paying for an attorney, why not give them a payoff date and see what figure they come back with? Don't pay a settlement before getting the details spelled out in writing.
      0 Votes

  • JT
    Jun, 2014
    Justinian
    I had Stafford and William D. Ford loans. Some tough times (major illness and natural disaster) resulted in me getting way behind. So much so that I was surprised by a collection call one day out if the blue. Wanting to take care of it before things got worse, I asked what means of payoff would least impact/restore my credit. The agent said full and immediate payment. So I scrape together $20,000 and stroke them a check. Now it is listed as a defaulted loan, paid in full, with a mountain of late payments. Tried goodwill letter, just got a form letter response saying it's paid in full...tough luck on the rest. Spoke to Dept of Ed, they said to write to collections and tell them of the agent's inducement to pay in full rather than rehab. Nothing. Is there any legal means I can use to force them to honor the agent's "promise".
    0 Votes

    • BA
      Jun, 2014
      Bill
      A contract is a contract, whether spoken or written. The trick with spoken contracts is proving what each side promised. That's why people in business say, "Get it in writing." Here, what can you prove? You say you acted in reliance on the collection agent's promise to clear your credit report, and I believe you. But what will a judge believe?

      Consult with a lawyer who has contract law experience, and ask him or her how strong of a case you have against the collection agent for breach of contract.
      0 Votes

  • AD
    May, 2014
    Ashley
    Can I have negative 'past dues' erased from my credit report. They are technically accurate but past due by 91 days instead of 90. I made a payment but because my payment amount recently was lowered due to income review, i paid the wrong amount (the lower amount) and the remaining unpaid $30 carried forward continually showing up on my credit report as past due completely demolishing my credit score..can i have this removed through Dept of Education (federal loans) or their loan servicer?
    0 Votes

    • BA
      May, 2014
      Bill
      Some Bills.com readers who had similar circumstances with credit card companies asked the creditors to reset the due date back a few days so the payments did not appear to be late. You lose nothing but your time asking your student loan servicer to reset the due date on the offending payment. If you are successful, please return here to let us know how you convinced the servicer to reset the delinquency date.

      It is almost a certainty that neither the Dept. of Education or your loan servicer will remove this account from your credit report under these circumstances.
      0 Votes

  • JJ
    Apr, 2014
    Jim
    I found this website that discusses canceling a student loan debt due to a technicality regarding who holds the actual note. Have you ever heard of this? It seems too good to be true, but, I wonder what the downside would be to trying it? http://studentloansstudentloans.info/cancel-student-loans.htm
    0 Votes

    • BA
      Apr, 2014
      Bill
      I am not familiar with the claim that student loan debt can be cancelled due to a securitization issue. If you wish to pursue this course, then I would make two recommendations. First of all, I recommend that you continue to make your student loan payments on time. Secondly, I would be wary of anyone asking for an upfront fee.
      0 Votes