This subreddit and some of the older guides and posts helped me early on as I started to research defaulting on my private student loan debt. I'm over one year in on a strategic default and was just approved for a mortgage this week. I wanted to share some of the things I've learned along the way in hopes it can help you like many others have helped me on this journey. Also, adding the obligatory "I'm not a lawyer, nothing that I say should be construed as legal advice, consult with a laywer, etc."

For reference, I am in my late 30s, married and own a home, cars and several assets. My original loan balance was $200K; over the course of 13+ years of faithful payments, I had knocked this down to $175K. After being in forbearance for 2+ years due to COVID (my lender was one of a few that did offer forbearance in the thick of the pandemic) and with the help of compounded interest, my balance jumped back up to $200K and my payment was north of $1,400/month. As I was getting ready to enter repayment in early 2023, I had an "I'm done with this" moment that led me to this subreddit. I went into this strategic default with a 790+ credit score (which is what scared me the most and I talk about further down). After refinancing my loan in my early 30s, I did NOT have a co-signer on my loan.

Do Your Research

Specifically, you need to understand the following:

• Does your state consider private student loan (PSL) debt to be "consumer debt?" I haven't seen a situation or state where this isn't the case, but always verify. This will determine what protections you do or don't have should you default and the lender chooses to come after you.
• Assuming PSL debt falls under consumer debt in your state, what is the Statue of Limitation (SOL) for lenders suing for default on consumer debt in your state?
• Does your state allow or prohibit wage garnishment for judgements?
• Does your state allow liens against assets for judgements?
• If you live in a different state now from where you lived when the loan originated, which state law dictates the SOL? I've seen conflicting information about this, but it seems like the lender usually files in the state you currently reside in.
• What are your current assets and do you have any way to protect these should the lender sue and you end up with a judgement against you? Again, much of this will also be dictated by state law and some states protect consumers from having liens placed on their home, car, etc. and others don't. If you are going to shift assets out of your name, you need to consider doing this BEFORE you default and have a "good reason" for doing this should you end up in court. If you have no assets, this will be the one time in life where you should pat yourself on the back for having one less thing to worry about and embrace the default full-on.

Prepare

• Build a budget. Obviously, you probably wouldn't be considering defaulting if you were flush with money (or maybe you are and you just want to stick it to the man), but you need to understand what's coming in and what's going out before you jump off the default cliff.
• If you have a co-signer, you need to talk to them. 99.9% of the time, they aren’t going to want you to default and a decision like this won’t just impact you. Explore your options to refinance all or part of your loan without a co-signer (yes, you can refinance part of a loan if you can’t get approved to refinance the entire amount without a cosigner; if you do this, you would want to keep paying the loan with the cosigner and plan on defaulting on the refinanced loan with no co-signer).
• Apply to and start collecting credit cards. It's counter-intuitive to what we are often taught, but trust me on this. Even if you are in your early 20s and have little to no credit, open as many credit cards as you can, even if you only have a $250 credit limit. If you have little to no credit, a Capital One card, gas cards, and retail cards will usually approve you and extend you a line of credit. It's usually good to apply for a few, then wait 30 days before applying for another round.
• Start using the credit cards in small increments. If you are new to credit, let the bill cycle, then pay off the statement balance. If you pay off what you spend prior to the bill cycling, this won’t build your credit. It will just continue to show a $0 balance on your credit report and to lenders and the credit agencies it’s as if you never spent this money. The other important part of what I mentioned is to PAY OFF YOUR STATEMENT BALANCE EACH MONTH. DO NOT start spending above your means on these cards. Stick to your budget that you already built and shift your monthly bills to these cards. For bills that require payment via ACH/debit/checking, there are several apps out there that let you process these through the app using a credit card and charge a small fee. Not saying you should go that way (or spend the extra $), just throwing it out as an option.
• Pull your credit reports and download your student loan statements shortly before you stop making payments. You will want the most recent records of your last payments, your credit, etc.
• If possible, meet with a consumer debt attorney in your state (even better if you can find one who specializes in student loan debt – surprise, surprise, more of these are popping up!). I met with one who was able to advise me of the consumer debt laws in our state, confirm the SOL clock started in our state once the lender charges off the debt (sells off to collections), confirm our state does not garnish wages, and also confirmed that a lien COULD be placed on our home if I was sued and ended up with a judgement against me. This was helpful in helping my partner and I evaluate whether to sell our home while we let the SOL clock run out.
• Delete your personal voicemail greeting and consider changing your phone number. Make sure your contact info is removed from places like LinkedIn and social media, and lock down your LinkedIn and social media accounts – make the debt collectors and attorneys work a little to find you!
• Decide whether you are going to engage with your lender, and down the road debt collectors, or not. Many on this forum and others advised not to take calls from either and I chose to follow this approach. I decided I would only respond to written communications that were legal in nature and from an attorney, at which point I would retain the attorney I consulted with.
• If it makes sense, educate your family on your plan, especially if they might receive a call from a debt collector. Make sure your family knows that in no uncertain terms, they are not to give out your contact info (especially if you’ve changed it). They should just not answer the calls, but if they do answer, they should immediately hang up. Also, it helps to let someone know your plan so they can support you.
• Get your mindset right. This was HUGE for me. I shifted my mindset to look at defaulting as a strategic business decision and not one tied to my self-worth or my “goodness” as a human. I told myself that countless successful business leaders have zero problems with defaulting on business loans when it is what’s best for the company; they recover and they also sleep just fine at night. I also made a list of what freeing up this money would do for my family (or if you aren’t currently able to make the payments, make a list of what not owing this money in the future will mean for you). Here were some things from my list:
• Save for my child’s education so they don’t continue the cycle of student loan debt.
• Travel more as a family, gaining invaluable experience and life perspective (this will ALWAYS win out, imo).
• Save for retirement, something neither my parents or my partner’s parents were able to do.
• Shift careers in the future (real estate investment, etc.).

Make the Jump!

• Once you make the decision, it’s time to jump in with both feet!
• If you have been making full or partial payments, make sure auto-draft is cancelled if you previously had it set up.
• Delete all banking account information from your PSL account(s); if you are asked to confirm your contact information when you log-in, skip this.
• Don’t open emails from your lender or debt collector. Many companies have tracking software that will tell them if an email is opened, the date and time it was opened, and how long the reader kept the email opened for.
• Track and document everything – the last payment you made, the date it cleared, etc. If you do communicate with your lender or debt collectors, document the agent’s name, the date and time of the call, and record the call. If you are in a one-party consent state, you don’t need to notify the other party that you are recording the call (but you can for giggles, it might throw them off a little). If you are in a state that requires notification, make sure you have a script written out with the language so it’s “official.” All this info and wording is usually is available online with some detective work.

Now What?

• It will take a few months to officially move into “default” status with your loan. This was the hardest part for me and felt a lot like “hurry up and wait.” The lender would call, email, and send letters about making payments, even just partial ones to bring my account current, and at times I questioned and just hoped I made the right decision. Depending on the lender, your loan amount, the state you live in, etc., you may move into default status quickly or it may drag out for 90+ days. My loans officially moved into default status in March 2023 and were closed and sold to collections in May 2023.  
• If you monitor your credit score during this time, buckle up for a ride! I went from a 790+ (I cleared 800 with one of the credit bureaus which I was so proud of at the time and now could care less about – the credit system in our country is a joke!). At its lowest, my credit score was in the very low 600s, flirting with the high 500s. During this time, I knew I wasn’t going to be approved for ANYTHING, but already had a solid credit history AND had a collection of credit cards I used to help me rebuilt and I also had a few I could pull out for emergencies.
• Since my loan was closed with the lender and sold to a collection agency, I have not received a phone call, email, or letter. I realize I need to knock on wood as I type that last sentence! I know I could still receive a call or letter at any point and if/when that time comes, I know I have a plan to address it. This allows me to sleep at night and honestly, most days I forget I even had student loan debt.
• Recently, my partner and I decided to explore the possibility of selling our current home and buying a townhome. We are elder millennials who have bought and sold multiple times over the years and have had zero help from family when it comes money (they’ve actually made it more challenging, but that’s a post for another sub). I share that because I know the market is crazy and home ownership feels out of reach for many folks reading this, but I also want to share so you know it’s possible to come back from a default.  
• Since January 2024, I was impacted by layoffs and took another job and a significant pay cut, leading to us once again re-evaluating our finances. Leveraging the strategy I mentioned above with credit cards, I’ve rebuilt my credit to 680-710, depending on which credit bureau you ask, and was able to get approved for a mortgage loan using just my income and credit score. The mortgage lender set up a call to confirm a few things, including asking me about the defaulted loan. I was very transparent and shared that this was a strategic decision I made after much research and based on my credit report, he could hopefully see I am generally a responsible individual who pays my bills on time. He actually congratulated me and told me this was clearly a good decision because the loan was showing as closed and even though it was sold to collections and overall, negatively affected my credit, because the loan shows as closed/sold off, it also shows a $0 payment, so it can’t impact my debt-to-income ratio!
• I also pulled my credit reports again during this time to confirm exactly how my PSL was showing up. It is showing as closed/charged off and will be eligible to come off my credit report in May 2029!

All in all, if I had it to do over again, I absolutely would and I wish I had done this much earlier. If you are considering a strategic default as an option for your PSLs, do your research! Even if you need to relocate to a state with a low SOL and one that prohibits wage garnishment, it could very well be worth it! I’m happy to answer questions and will update if/when there are updates.