November 12, 2020

Defaulted Student Loans

Dear Consumer Ed:

I have an old student loan debt that I defaulted on in 2004. It is still on my credit report. I thought the statute of limitation on debt was six years. Don’t they have to remove this from my credit report by law? Also, is a collection agency still allowed to garnish my wages for this?

Consumer Ed says:

For federal student loans there is no statute of limitations. Missed payments will begin to be reported to credit agencies once you are delinquent on the debt for 90 days. The default will show as a derogatory mark on your credit report for seven years from the date of default, except for Perkins Loans, which stay on your credit report until they are paid in full. Federal student loans may be collected through an administrative wage garnishment process, however, the amount of the garnishment cannot exceed 15 percent of your disposable pay.

While most student loans are federal loans, some are private loans. Private student loans are non-federal loans made by a lender such as a bank, credit union or a school. If your loan is a private student loan, then in Georgia, a six-year statute of limitations for contracts might apply, or a twenty-year statute of limitations may apply if signed under seal.  Pursuant to the Fair Credit Reporting Act, this type of debt may only appear on your credit report for seven years after the date of default. If a judgment was obtained against you for a defaulted private student loan, then a collection agency may still be able to garnish your wages if the judgment has not become dormant.  If you are considering bankruptcy, you should consult an attorney; your student loan debt is probably not dischargeable. 

For additional information about defaulting on a student loan, visit or

Submit your own question to Consumer Ed.  Remember…we do not give legal advice. Always consult a lawyer about legal issues.

Related to: