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- State issued professional license or certificate may be withdrawn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.