For student loans authorized under Title IV of the Higher Education Act, default occurs when you fail to make payments on your loan for (a) 270 days if you repay in monthly installments or (b) 330 days if the payments are due less frequently.

During the delinquency period, the lender must exercise "due diligence" in attempting to collect the loan; The lender must make repeated efforts to locate and contact you about repayment. If the lender efforts are unsuccessful, steps will be taken to place the loan in default and turn the loan over to LOSFA by filing a claim against the guarantee.

Once the lender is paid the amount of the claim, the loan is then owed to LOSFA as a defaulted loan and demand is made for payment in full.