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Do Student Loans Go Away After 7 Years? (2022 Guide)

George Simons | October 19, 2022

Summary: Even if the statute of limitations on your student debt has passed, the debt can still show up on your credit report for up to seven years. There is no statute of limitations on federal student loans, but private student loans have an average statute of limitations of six years. SoloSuit can help you respond to a student debt lawsuit.

If you took out student loans to pay for an undergraduate or graduate degree, you may have been surprised to discover that student loan debt impacts your credit and will appear on your credit report. Many people are surprised by this because of the notion that student loans are “good” debt, and that these debts are treated differently than credit card debt and personal loan debt.

Regardless of whether student loan debt is “good” or “bad,” it will impact your credit report.

Many consumers with student loan debt are curious about how long the debt stays on their credit report. For example, some people ask, “Will my student loan debt ever go away? Will it stop appearing on my credit report after seven years?” This article will answer these questions and share additional information about student loans.

Let's jump right in.

Do student loans ever go away?

Student loans don't just disappear with time—at least not on their own.

Student loans can stay with you longer than credit card debt and other loans. Private and federal student loans are not equal. Suppose you took out a Federal Direct Loan, Federal Family Education Loan (FFEL) Program loans, or Federal Perkins Loans. In that case, you have some avenues for the debt to reduce or go away sooner.

Some employers, repayment plans, and repayment periods can qualify you for debt forgiveness. Some include:

  • Public service loan forgiveness (PSLF): Generally, if you work for the public service for ten years and stick to your income-driven repayment plan for 120 months, you may be forgiven the remainder of the debt. Public service employers include the federal government, the state, local and tribal governments, and some non-profit organizations. You can check the Student Aid website for specific qualifications.
  • Teacher Loan Forgiveness: There's an arrangement to forgive up to $17,500 in debt for qualifying teachers who teach qualifying subjects at qualifying schools. You should have taught full-time for five years in a low-income education service agency, secondary, or elementary school to be eligible. Typically, you can't qualify for Teacher Loan Forgiveness and PSLF during the same period.
  • Closed School Discharge: If you enrolled in an institution that closed its operations shortly after you withdrew or were still a student, you might qualify for debt forgiveness. You may find qualifying loans and instructions here.

See this Student Aid summary for other situations where your federal student loan can be discharged or forgiven. You're probably thinking about the new student loan forgiveness program proposed by the Biden administration. Below, we explain how it works.

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How does Biden's student loan forgiveness plan work?

In August 2022, President Joe Biden announced that student loan borrowers would have up to $20,000 of their student debt forgiven. This forgiveness plan only applies to the following types of borrowers:

  • Only federal student loan borrowers will benefit from the plan. Private loans will not be forgiven as a part of the new program.
  • Only borrowers that make less than $125,000 a year, and married couples or heads of households that make less than $250,000 a year will be automatically eligible for $10,000 of debt forgiveness. The income threshold will pull from 2020 or 2021 tax years.
  • If a borrower meets the qualifications above and also received a Pell Grant during enrollment, they will be eligible for up to $20,000 in student debt forgiveness.

That being said, in order to qualify for the forgiveness plan, borrowers must apply to the program and prove eligibility. The debt won't automatically be forgiven.

How long will an unpaid student loan stay on my credit report?

Private and federal student loans will likely appear on your credit report with each of the “Big 3” credit companies: TransUnion, Experian, and Equifax. A “trade line” will appear on your credit report for each loan you took. A trade line is essentially a summary of a particular type of debt. So, for example, if you have multiple private and public student loans, each loan will have a trade line on your credit report. The trade line typically highlights the following info:

  • Total balance owed
  • Your payment history
  • The origination date of the loan
  • The company reporting the debt

Typically, a defaulted debt, including student loan debt, will be taken off your credit report 7 years from the date of the first missed payment. However, it is essential to understand that the 7 year period applies to federal student loans from the date of default OR from the date the loan was transferred from the guarantor of a Federal Family Education Loan (FFEL) to the Department of Education. In contrast, if you defaulted on a private student loan, it will remain on your credit report for 7.5 years.

This means if you took out, and subsequently defaulted on a Perkins loan, the tradeline will continue to show until the student loan is paid off, even after 7.5 years have elapsed. The only way to remove a Perkins loan from your credit report is to pay the loan off or to consolidate the debt with another loan.

Is there a statute of limitations for a debt appearing on your credit report?

This is a fairly common question highlighting the confusion associated with the term “statute of limitations.” The statute of limitations on student loan debt is the time period that a lender or debt collector has to sue someone for that debt. It is important to note that the time limit to file a lawsuit and the time associated with a debt appearing on a credit report are unrelated.

In other words, when the statute of limitations on a student loan expires, the borrower can no longer be sued for this debt. However, it does not mean a debt will be, or should be, removed from their credit report.

So what is the statute of limitations on student loans? Keep reading to find out.

The statute of limitations on student loans varies by state

First of all, you should know that public loans (i.e., loans disbursed and managed through the federal government) are not subject to a statute of limitations. If you take out a federal student loan, the government can come after you for decades. This means that federal student loan borrowers can be sued at any time for their debt. The government can also take other actions to collect the debt owed, such as wage garnishment or seizing tax returns.

Private student loans are different.

Private student loans are, in fact, subject to a statute of limitations. The applicable limitations period will be determined by either the state in which you reside or the state that controls the loan agreement. That being said, the statute of limitations on private student loans ranges from three to 10 years, but on average, it's six years.

Keep in mind that, even if the statute of limitations on your student loans has passed, lenders and collectors can still contact you about paying off the debt. However, they can no longer sue you for it.

How to deal with collection agencies

If you fail to make a student loan payment, or miss multiple payments, don't be surprised if a debt collector contacts you. Student loans receive virtually the same treatment as other loans when the borrower fails to make payments. Whether you have private or federal loans, they can end up with a debt collector. Still, there are important steps you can take to remedy the missed payments depending on the type of student loans you took out.

If you took out private student loans, there is no standard option or action to take when dealing with a collection agency aside from paying what is owed. However, you may be able to negotiate with the debt collector and try to establish a reasonable payment plan.

You should also know that a debt collector trying to collect payments on a private student loan generally are unable to:

  • Garnish your wages without a court order
  • Garnish your Social Security
  • Obtain your federal or state tax refund(s)
  • Block you from applying for and receiving government student loans to return to school

On the other hand, if you took out federal student loans, you may have additional options when dealing with a federal student loan collector. These options include:

  1. Rehabilitation: The debt collector will take your loans out of default status contingent upon making consecutive on-time payments. Generally, you can only rehabilitate a loan once. It is vital to successively make the payments on time since rehabilitation is the only way to remove the default notation from your credit history.
  2. Consolidation: When you consolidate your defaulted loans, you effectively pay off the default loan by taking out a new loan with new repayment terms.
  3. Repayment: This is the fastest and most efficient way to settle your outstanding student loan debt if you can afford to pay your defaulted federal loans back. Under some circumstances, your debt collector may be willing to waive some of the associated late fees and other collection expenses.

If you're being sued for a student loan debt, use SoloSuit to respond.

To learn more about how to respond to a debt lawsuit, check out this video:

Frequently asked questions about student loan debt collectors

Some consumers find that the debt increases after debt collectors take over. Here's why this may happen.

Can collection agencies charge more than you owe?

Yes, and no. When debt collectors acquire your debt, they must follow the Fair Debt Collection Practices Act (FDCPA). According to this act, they may add collection fees and court costs to the original amount if the court allows. But they cannot arbitrarily ask you to pay more without documented proof of the collection fees.

Can collection agencies charge interest?

Yes. Debt collectors can legally charge interest on the debt even after it goes to collections. The interest rate should be similar to the one in the contract you signed with the original creditor. The agreement usually has a limit to how much interest can be applied. Different states cap the rates at specific amounts in cases with no stated maximum limits (as with medical bills).

Do I have to pay collection agency fees?

Unless you work out a repayment plan that forgives collection fees, you have no option but to pay. However, you can negotiate with the debt collector to lower the principal amount. Remember, they bought the debt for much lower than they are asking. The room to negotiate is expansive. But you can't force a debt collector to accept your offer.

How can you beat debt collectors?

It's always wise to ask for debt validation from every debt collector who contacts you. As you have seen, the amount of debt can change in the hands of debt collectors. Don't just take their word for it. Instead, request for verification by sending a Debt Validation Letter.

If a debt collector sues you, use SoloSuit's Answer to file a quick, professional response with the court. It takes only fifteen minutes to create your response with the SoloSuit web app.

What is SoloSuit?

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You can use SoloSuit to respond to a debt lawsuit, to send letters to collectors, and even to settle a debt.

SoloSuit's Answer service is a step-by-step web-app that asks you all the necessary questions to complete your Answer. Upon completion, we'll have an attorney review your document and we'll file it for you.

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