Statute of Limitations for Federal & Private Student Loans

Statute of Limitations for Federal & Private Student Loans
Daniel CohenDec 14, 2011
Key Takeaways:
  • Federal student loans have not statute of limitations.
  • Private student loans are subject to state statutes of limitations.
What is the statute of limitations for student loans?

If I took out a student loan 10 years ago and haven't paid it off yet, do I still have to pay it? What is the statute of limitations for student loans?

Thank you for your question about statute of limitations on student loans.

You did not specify whether your loans are federal student loans or private student loans. This distinction is huge, as the statute of limitations for federal student loans and for private student loans are not the same.

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.

Federal Student Loans

The bad news: Due to changes in federal laws in 1998 and 2005, collection on federal student loans now have no statute of limitation and — with very limited exceptions — can no longer be erased though bankruptcy.

The good news: There are many options available for student loan resolution, some of them quite flexible. Depending on the specifics of the situation, student loan borrowers may be eligible for programs that offer extended repayment periods, modifications that are income-sensitive (income based repayment or income contingent repayment, or graduated (starting small and rise over time). Some plans also offer possibility of "rehabilitating" a defaulted loan, so that some or all negative information about the loan is expunged from the borrower’s credit report if certain criteria are met.

Several federal and state agencies offer programs to help you cancel or reduce all or a portion of your student loan debt. Student loan forgiveness programs involve you making and honoring a long term commitment to teaching, nursing, or military service. To learn about some of the specific forgiveness programs available and how you can apply, visit the Federal Student Aid Web site.

Struggling with debt questions? Let the Debt Coach review your debts and give you your options to resolving these debts.

Private Student Loans

Private student loans have entirely different rules for statutes of limitations. Unlike federal student loans, private student loans are subject to state’s statute of limitations for taking legal action to collect on written contracts. Once the statute of limitations expires, you can raise the statute of limitations as a defense, if the creditor attempts to take legal action to collect on the debt. However, just because the statute of limitations passes does not mean that a creditor or collection agent cannot try to collect on the debt. If you make a payment on a debt whose statute of limitations has passed, you can bring an expired debt back to life.

The statutes of limitations start running 30 days after your last payment on the debt. If you think that the statute of limitations for a private student loan debt is about to expire, I encourage you to consult with an attorney in your area to discuss the implications of an expired statute, and what actions you need to avoid to prevent the statute of limitations from being tolled or restarted.

The statute of limitations for a written contract no longer apply if the creditor or collection agency sues you, before the statute of limitations expires, and obtains a judgment against you. If that happens, you will be subject to wage garnishments, bank levies, and liens.

I hope this information helps you Find. Learn & Save.




JJan Campbell, Jun, 2014
Does deferring payment of a student loan while in school reset the statue of limitation for the loan payment? The signed contract I have from Citibank states that my loan repayment should have started in 2008. However I deferred the loan because I was in school. My credit report shows they expected payment once I graduated but my contract says otherwise.
BBill Admin, Jun, 2014
It is not possible to answer your question without reading your original contract and any deferment contracts (if any).

It is highly likely a court would consider the statute of limitations reset by any deferment agreement you and Citibank reached subsequent to the original contract.

To invent some facts for the sake of illustration, if your original contract stated you needed to start payments in January 2009, but then subsequent to the original contract you two agreed to defer payments until January 2011, then the statute of limitations clock would begin in February or March 2011.

What appears on your credit report is important for the sake of your credit score, but it is not a legal ledger or last word in defining your legal obligations. Information in your credit report is a window into what you lenders report about you, but it should not be used as proof of anything.
DDale Beavers, Apr, 2014
I am presently being sued on a Mohela private loan. Would you mind citing the statute or case law which supports the contention that private loans are subject to the statute of limitations?
BBill Admin, Apr, 2014
The laws you seek vary by state. To learn more about the statutes of limitations and other collection laws for most states, go to the statute of limitations on debt page and find your state. Most state names on this page are hyperlinks. Click-through to your state to find details about your state's collection laws, including citations to relevant law.

You indicated you reside in Mississippi. See Miss. Code. Ann. § 15-1-1 et seq to learn more about Mississippi's statute of limitations rules.

You mentioned a lawsuit. Read the article How to Answer a Summons & Complaint and then consult with a lawyer who has civil litigation or consumer law experience.
DDale Be, Apr, 2014
Thanks for your response. I already know that the Mississippi Statute of limitations on contracts is six years; however the Mohela contract states that it is governed by Missouri law irrespective of conflict of laws rules, and the statute of limitations in all civil actions in Missouri is five years. My question again is this: is there a Federal statute or case precedent that states private student loans such as Mohela are subject to there statute of limitations, versus Federal loans, which are not?
BBill Admin, Apr, 2014
What you seek is a citation to case law where a Mississippi appellate or supreme court says private student loans are subject to Miss. Code. Ann. § 15-1-1. I do not know that citation, and suggest you consult with a Mississippi lawyer who can research this issue for you.

The general rule is private student loans are subject to state statutes of limitations, but that's not a citation or good enough for a brief filed with the court, which will want to see a citation.
ppaul A., Apr, 2014
I never made a payment on my private student loans. Will statute of limitation still apply from the date the loans defaulted? Also, if I spoke to them over the phone, does that restart the statute of limitations?
BBill Admin, Apr, 2014
Regarding your first question, private student loans are subject to state statutes of limitation. Review the article above for a more thorough explanation of private student loans and state statutes of limitation.

You can reset a statute of limitations in two ways:
  • Making a voluntary payment to the lender
  • Making a written promise to pay the loan.

Note that a written promise to pay rule is the standard most states follow. Generally, if you have a conversation with a lender about payment options, the balances due, and your financial situation, that does not rise to the standard of making a promise to pay.

AAlford Elliott, Apr, 2014
My private Sallie Mae student loan was processed in Pennsylvania and I went to school in New York but I live in Chicago at the moment. Which state statute of limitation applies?
BBill Admin, Apr, 2014
Tricky question. The answer could be Pennsylvania, New York, Illinois, or even another state depending on the loan contract you signed and where you reside if Sallie Mae decides to file a lawsuit against you. Read the article Which Statute of Limitations Applies to Your Situation to learn how to analyze a statute of limitations issue.
AAlford Elliott, Apr, 2014
I contacted Sallie Mae and they said my private student loans went into default May 31, 2012. Does the SOL clock start there?
BBill Admin, Apr, 2014
The answer to your question is, "Probably yes." The probably is a qualifier here because we don't know exactly when Sallie Mae considers a private student loan in default. Is it 30 days after your first missed payment? If so, most states would allow a creditor to start the clock at 30 days. However, Sallie Mae may not consider a borrower in default for 60, 90, or even 120 days.

If you are ever sued by Sallie Mae and the statute of limitations comes into question, do not take Sallie Mae's date of default as gospel. Your state's statute may define the clock start differently.
PPat Hub, Apr, 2014
I had a $10k Federal Student loan upon graduation in Michigan back in 2008. In 2009 while at boot camp, the loan went into collections. I have never made a payment nor have I ever replied to any collectors. What is my SOL on the situation?
BBill Admin, Apr, 2014
Federal student loans are not subject to state statutes of limitations.
LLloyd Christmas, Mar, 2014
I have an interesting situation here. I took out a private student loan through Sallie Mae in 2001 with my Father as the co-signer. Since then, we both have gone through tough times and were never really in a situation to pay on it. However, over the years he had made a few small payments here and there which have kept the account current, therefore restarting the statute of limitations. My question is this: Since I have never acknowledged the debt, nor made a single payment, will I be able to apply the statute of limitations to get this removed from my credit report? Or will his activity on the account prevent that from happening? **I know this sounds like Im trying to screw my Dad over and stick him with the debt, but I warned him over the years about the SOL and he proceeded to mess that up with a few $20 payments here and there. He also says he really doesnt care about his credit now that he's retired....
BBill Admin, Mar, 2014
You father didn't do either of you any favors by making the periodic payments. Because this is a joint debt with, I assume, both of you jointly and severally liable, a voluntary payment by either of you resets the statute of limitations clock back to zero. However, that's the general rule, and the best source of information on this particular detail is best answered by a lawyer in your state who has consumer law experience.

Have a heart-to-heart with your father explaining you two need to work in a coordinated manner for you to resolve this debt. His free-lancing may not have any immediate impact on him or his credit score, but it's harming you.