Understanding The Loan Statute Of Limitations


Friday, July 17, 2020

Federal student loans have no statute of limitations which means you can be sued for unpaid debt at any time. Private student loans do not have a statute.



Undergraduate and graduate college students, earning their degrees both on campus and online, often have to take out loans to help pay for their degree tuition. Learn about the key term “statute of limitations” below.


What is a statute of limitations?


When discussing debt collection, the statute of limitations refers to the amount of time during which a creditor can sue you for an unpaid debt. When the statute of limitations on a debt expires, it does not mean your lender or collection agency cannot still attempt to collect the loan or that you are no longer required to pay it back. It means that you can no longer be sued for the means of collection.

It is important to understand what the statute of limitations means when you are considering taking out loans to pay for college.

Private student loans have a statute of limitations. Federal student loans have no statute of limitations.

What does this mean? Federal student loan borrowers can be sued at any time to collect an unpaid student debt. The government can use this tool to collect unpaid student loans. They can also use wage garnishment and the Treasury Offset Program that has the ability to seize tax refunds.

How can you prevent legal or collection action related to your student loan debt? Make sure to stay current on payments to avoid delinquency and default. As soon as you realize that you are struggling to make loan payments, immediately contact your lender or student loan servicer to discuss options.

The statute of limitations on private student loans varies by state and can be as little as 3 years to as long as 10 years.

When the statute of limitations expires on your college student loan, you can no longer sued for collection but you are still obligated to repay.




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