How to Go Back to School With Unpaid Student Loans

Becoming a student again after defaulting on a student loan may be challenging.

Paying tuition and living expenses while in school is easier with the help of student loans. After you finish your schooling, lenders require that you make monthly payments to repay the student loan. As long as you have made payments as agreed so far on your existing student loans, you are eligible to return to school and receive more financial aid. If your loans are in default, meaning that you have not made payments recently even though payments were due, you must get them back into good standing before you can receive more financial aid to return to school.

Rehabilitate Defaulted Loans

Step 1

Call the lender for your defaulted student loans. Tell the customer service representative that you are planning to return to school and would like to restore your financial aid eligibility. Lenders vary in their procedures for getting loans out of default, so talking to your lender is the best way to find out what your specific options are. For example, federal student loans typically have more options than private student loans.

Step 2

Ask the customer service representative how to rehabilitate your student loan. With rehabilitation, you make on-time payments for a specific number of months and the lender will then put your loan back into good standing.

Step 3

Repay the unpaid student loan in full immediately if you can afford to. This is the fastest option for restoring your eligibility.

Step 4

Consolidate your unpaid student loans through the federal government or a private lender. This pays off your loan that was in default and replaces it with a new loan for the same amount. Because the new loan is in good standing, you will be eligible for more financial aid. However, not all lenders will consolidate loans in default because you carry a significant risk for default in the future.

Defer Unpaid Loans

Step 1

Call your student loan lender and ask the customer service representative how to apply for a deferment, which lenders grant to anybody who is studying at least half-time. When your loans are in deferment, you do not have to make the monthly payments. This allows you to use any money you make while you are back in school to pay for your school costs and living expenses.

Step 2

Fill out the required forms for deferment and return them to your lender, who will confirm your enrollment status with your school.

Step 3

Continue making your regular scheduled loan payments until you receive confirmation from your lender that your loan is deferred.


If you are in default on your unpaid student loans, an alternative option is to just pay for your future education without financial aid if you can afford to. That way, you do not have to go through the process of getting your existing loans into good standing before you begin school again.


If your loans are not subsidized by the federal government, interest will continue to accrue on them while they are deferred. Therefore, when you finish school, you will owe more on your old student loans than when you began.

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