What is default?

When you signed your promissory note and received your student loan(s), you made a legal commitment to repay the loan(s). When you failed to make payments for more than 270 days, your loan went into default and was purchased by the Missouri Department of Higher Education and Workforce Development. The MDHEWD, along with the collection agency assigned to your account, is now responsible for collecting the money you owe.


Unlike consumer debt, such as credit cards and car loans, there is no statute of limitation on collecting federal student loan debt. Interest continues to accrue on your debt and collection costs will also be added to your balance. The collection cost amounts may be as much as the U.S. Department of Education’s current maximum amount of 24.34% of the outstanding principal and interest balance per year. The loan must be repaid, even if you did not complete your program, you were unsatisfied with the level of educational services you received, or you were unable to obtain employment in your field.


Utilize the Help for Defaulted Borrowers brochure or learn more by clicking on the following sentences:


What are the consequences of default?


Now that I have defaulted, what are my options?


What are satisfactory payments?


Need help communicating with your loan holder?


Are you a veteran?


Beware of paying for free services.


Steps you can take now to get on a better financial path.