Is There a Statute of Limitations on Student Loans?
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Federal student loans have no statute of limitations, but private loans do, with lengths varying from state to state.
When collecting a debt, a statute of limitations refers to how long a creditor has to sue for repayment. If the statute of limitations expires, a creditor can’t sue you — but that doesn’t mean your student loans disappear. The loan’s holder may still be able to collect that debt, though it can’t use the court system to do so.
Don’t stop paying loans waiting for the statute to pass. You’ll be years into student loan default before it does, and there’s no guarantee you won’t be sued. But if default has already happened, understanding the loan’s statute of limitations could protect you in court and from debt collectors.
How long is the statute of limitations on student loans?
For debts with written contracts, the statute of limitations ranges from three to 10 years, depending on the state. Six years is the most common statute of limitation for debts like private student loans, with 22 states using this term, according to the nonprofit InCharge Debt Solutions.
Typically, your loans are subject to the statute of limitations for the state you live in. But if you’re sued, the court may use a different statute based on where the lawsuit was filed or language in your loan’s paperwork.
If you’re sued and are unsure which statute applies, hiring a lawyer may help. While you’ll likely have to pay for the lawyer's services, an attorney who specializes in student loans should be able to determine whether your statute of limitations has expired and if you have a case for dismissing the lawsuit.
When does the statute of limitations start?
Statute of limitations start dates also depend on state law and may be open to interpretation. Typically, a loan’s statute would start with one of the following events:
The last payment you made. Let’s say you live in a state with a six-year statute of limitations and last made a payment in January 2019. Your creditor would have until January 2025 to sue you over the past-due debt.
The first payment you missed. Based on the example above, the statute would now last until February 2025, since February 2019 would have been your first missed payment.
When your loans defaulted. Default timelines vary for private loans. The Consumer Financial Protection Bureau says the average length is 120 days, but loans can also enter default after a single missed payment.
What happens after the statute of limitations passes?
If a creditor does not know the statute has expired, it can still take you to court — don’t ignore a summons about your debt. You can present a defense that your student loans should be considered “time-barred,” or no longer collectible, based on the statute of limitations.
Even if the court agrees with you, your creditor may still be able to contact you about the debt, depending on your state’s laws. But it wouldn’t have access to collection tactics a court judgment could have enabled, like garnishing your wages or placing a lien on property you own.
The creditor also cannot threaten you with these actions or a lawsuit. All of its collection efforts must comply with the Fair Debt Collection Practices Act (FDCPA). That includes providing an honest answer if you ask whether the statute of limitations has expired.
By contrast, federal student loan holders can collect defaulted loans via wage and tax refund garnishment without a court order, making a statute of limitations unnecessary for these debts. Getting them out of default is the best way to stop collection actions.
Can you restart the statute of limitations on student loans?
It is possible to restart the statute of limitations on student loans. Like the statutes themselves, actions that do this vary on a state-by-state basis but may include:
Paying any amount toward the loan.
Promising in writing to repay the debt.
Acknowledging that you owe the debt.
You can also pause, or “toll,” your loan’s statute by doing things like moving overseas or filing for bankruptcy.
The FDCPA prohibits debt collectors from using practices that trick you into restarting the statute of limitations. If you feel that this has taken place, contact a lawyer and submit a formal complaint to the Federal Trade Commission.
Should you try to settle your student loans?
Once the statute of limitations passes, a creditor will likely be more open to accepting a student loan settlement for less than you owe. But there may not be much upside in doing so.
Some states prevent debt collectors from actively pursuing the debt after the statute expires. And from a financial standpoint, if the statute has expired, the default and unpaid debt may soon fall off your credit history. This happens after seven years.
It’s also murky whether pursuing a settlement could equal acknowledging the debt — which might restart the statute of limitations. This is another situation in which it may be best to consult a lawyer who specializes in student loans.
