There are serious consequences to defaulting on your student loan.
Federal Student Loan Consequences
If you make monthly student loan payments, default occurs when you fail to make a payment for 270 days. There are severe consequences to defaulting on your student loans. The consequences include:
- The entire unpaid balance of your loan and any interest is immediately due and payable. The student loan debt will increase due to late fees, interest, court costs, collection fees, attorney’s fees, etc.
- You no longer can request a deferment or forbearance.
- You lose eligibility for additional federal student aid.
- Your loan is assigned to a collection agency and it will be reported as delinquent to credit bureaus.
- The IRS can take your federal and state tax refund to collect any of your defaulted student loan debt.
- Your wages can be garnished.