What Could Happen If My Loans Are In Default?

You will be considered in default if you do not make a payment for 270 days (9 months).  Perhaps the biggest penalty of defaulting on your student loans is that your credit rating is damaged.  Your ability to rent an apartment, finance a car or house, or even to get a job, could hinge on your good credit.

In addition to reporting your default to credit bureaus:

  • Loans may become immediately due and payable
  • Income tax refunds will be withheld and applied to your loan balance
  • Wages will be garnished
  • State issued professional license or certificate may be withdrawn
  • Loss of eligiblity for future student loans and other types of aid programs
  • Loss of monthly repayment options and deferment
  • Initiiation of court action


Defaulting on student loans can be very expensive.  Use a Default Calculator, provided by FinAid.org, to find out how expensive defaulting can be.

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