Student Loan Default FAQ
Default occurs when you have not made payments on your student loan according to the terms of your promissory note. When your loan defaults, you’re considered in violation of your loan agreement, and your lender or servicer can request immediate payment in full. Default can have several immediate negative consequences and a long-lasting negative effect on your financial future.
If your monthly payments are more than your current financial situation will permit, help is available. Please contact your loan holder, servicer, or Trellis Company immediately to learn about your options and avoid the consequences of default.
Here are some answers to frequently asked questions.
Contact your lender, servicer, or Trellis and explain that you cannot pay and why. Your servicer works with and for your lender to bill, collect, and provide you with information pertinent to your loan. Contact your servicer immediately if you’re having trouble making your loan payments so you can avoid delinquency and potential default. Your lender, servicer, or Trellis may be able to provide you with repayment options and help you through your financial rough spot.
Trellis Company is a nonprofit organization that has an agreement with the US Department of Education to administer the Federal Family Education Loan Program (FFELP). Trellis Company (or TG) is a guarantor of your FFELP student loans. One of Trellis’ primary responsibilities is to provide information to help borrowers understand FFELP loans and their obligation to repay those loans.
If a borrower fails to make payments on a loan for at least 270 days, he or she is considered in default. In that case, the lender may file a default claim with Trellis for repayment of the loan. Trellis will pay the money the borrower owes to the lender, and then becomes responsible for collecting the loan on behalf of the federal government.
Default is the failure to repay a loan according to the terms you agreed to. For most federal student loans, you’ll be in default if you have not made a payment in more than 270 days. After that, your lender can file a default claim with the guarantor of your student loans. The guarantor is responsible for paying the money you owe to your lender. The guarantor then works to collect your loan on behalf of the federal government through a variety of options.
A couple of other terms you may see: “Current” means you’ve kept up with payments on your loan. “Delinquent” means the loan servicer has not received payment by the date it was due.
Claim pending means the guarantor has not yet paid the lender’s claim, and it might be possible for you to avoid the consequences of default. However, once your lender files a claim, the guarantor will pay the claim after only a few days. You must act immediately!
When a default claim is paid, the guarantor takes over the responsibility to collect on your loan on behalf of the federal government.
Because bad things happen when you default, you should attempt to avoid it. For example, after you default, the cost of collecting on your debt may be added to the balance of your loans. Any income tax refunds that you’re eligible to receive may be diverted to repay your defaulted student loans. Money to repay your debt could be deducted directly from your paycheck without your consent. Default also has a negative impact to your credit. Federal regulations require a guarantor to report your defaulted loans to all nationwide consumer reporting agencies. The record of your defaulted student loan will continue to show up on your credit report for seven years from the date of the delinquency that led to the default.
Trellis Company accepts many forms of payment for your defaulted student loan.
Credit card, debit card, or autodraft
Make payments online via myTrellis. Trellis does not charge a fee for autodraft payments; however, check with your financial institution about any fees it may charge. Our payment processing service provider assesses credit and debit card payments with a processing fee by of 2.21 percent per transaction. We’ll disclose the total charge (your payment plus the processing fee) to you before the transaction is authorized so you may cancel before any charges are incurred. Your account may also be eligible to set repayment terms and schedules if it hasn’t been referred to a collection vendor or entered into administrative wage garnishment.
Check, money order, or cashier’s check
Mail (US Postal Service)
P.O. Box 659602
San Antonio, Texas 78265-9602
3500 Wadley Place
Trellis Mail Center, Ste. 303
Austin, Texas 78728-1279
In our lobby during regular business hours (M-F, 8:00 a.m. to 5:00 p.m., Central Time)
301 Sundance Pkwy.
Round Rock, Texas 78681
Please include your Trellis Company (or TG) account number with your payment to ensure proper crediting. If you don’t know your Trellis (or TG) account number, call Trellis Company at (800) 222-6297 or send an email to firstname.lastname@example.org.
Western Union Quick Collect
With Western Union Quick Collect, fees depend on how quickly you want to expedite the payment. Your payment can be posted to your account the same day as the transaction if it’s received in our office before 2 p.m. Central Time. To use Quick Collect, visit a Western Union office near you. List “Trellis Company” in the Pay To field and “Trellis TX” in the Code City field. Use your Trellis Company (or TG) account number in the Your Account Number field on the WUQC form.
For more information on payment methods, call Trellis at (800) 222-6297 or send an email to email@example.com.
For non-payment correspondence, please use Trellis’ general correspondence address:
P.O. Box 83100
Round Rock, TX 78683-3100
You can enter into our loan rehabilitation program, take advantage of several different repayment terms, or apply for loan consolidation. Benefits of moving your loans out of default include reinstatement of eligibility for federal student aid.
A deferment allows you to postpone payment of your loan. You’re entitled to defer your student loan payments when you meet certain eligibility criteria and you request a deferment. Several deferments are available, covering different financial situations. To apply or get further information about deferments, contact your lender, servicer, or Trellis Company. You can also access and download deferment forms from our website.
Forbearance is a period of time during which a lender permits a borrower to temporarily postpone making payments or make reduced payments. Forbearance is usually granted at the discretion of the lender. Borrowers are still responsible for paying the interest that accrues; if unpaid, the interest may be capitalized. Forbearance is often used to bring delinquent loans current in situations where a borrower suffers a legitimate financial hardship but doesn’t qualify for a deferment.
Capitalization occurs when a lender adds unpaid accrued interest to the outstanding principal balance of a loan, increasing the balance, or the total amount owed. Interest then accrues on the new total principal balance.
If your lender didn’t receive a payment, contact the lender as soon as possible. Tell the representative the amount of your payment, when you mailed it, and the check or money order number. If the payment was a check, ask your bank if and when it cleared. If it did clear, provide this information to the lender along with a copy of the front and back of the check if possible. You might be asked to do the same with a money order. Write legibly on all correspondence and keep copies. Don’t delay — your lender can file a claim with the guarantor if it fails to receive a payment, deferment, or forbearance and your loan becomes at least 270 days delinquent.
If your lender didn’t receive your deferment or forbearance form, contact the lender as soon as possible. Request a copy of the appropriate form and send the completed form to the lender, either by fax or as a scanned email attachment. You can download deferment forms from our website.
If you’re in school and being billed for your student loans, you probably transferred schools, dropped below half-time status, or are attending school beyond your anticipated graduation date. You should contact your lender immediately and provide proof of your in-school status. If you fail to do so, your lender will expect you to begin making payments when your grace period ends. You should contact your lender whenever your circumstances change.
If you took out a Parent PLUS loan for a dependent student who’s still enrolled in school and you’re getting billed for the loan, tell your lender it should defer payments until six months after your student is no longer enrolled at least half time. If your student has transferred schools, or is attending school beyond his or her anticipated graduation date, contact your lender and provide proof of your student’s at least half-time enrollment status. If your student has dropped below half-time enrollment, contact your lender for other options.
When you signed the promissory note for your loan, you provided the names, addresses, and phone numbers of relatives and friends to be contacted in the event your loan holder, servicer, or loan guarantor is unable to contact you. These parties may get in touch with those contacts to obtain your current address and phone number.
Federal regulations require your lender to report your loan and repayment information to all nationwide consumer reporting agencies. If Trellis Company pays a default claim, federal regulations also require Trellis to report the default.
Provide your attorney’s name and telephone number to debt collectors when they contact you. The case number, city filed in, date filed, and chapter are also helpful. The more information you can provide, the faster the collection attempts will stop.
Trellis Company can track the loans that we’ve guaranteed. Call Trellis Default Aversion at (800) 338-4752 or access your Trellis Company (or TG) account at myTrellis.
Your financial aid office can help track loans with other guarantors and the Department of Education.
Questions about default prevention? We have answers.
P.O. Box 83100
Round Rock, TX 78683-3100
Phone: (800) 338-4752
Fax: (512) 336-6566
Monday – Thursday, 8 a.m. – 7 p.m., Friday, 8 a.m. – 5 p.m.