What happens if I don’t make my loan payments on time?
If you don’t make your loan payments on time and don’t contact your loan servicer about it, you will be considered delinquent in repaying the loan. If you continue in delinquent status, the loan will go into default.
If you default on your loan, you can be asked by the federal government to repay the entire loan immediately. You can be sued to collect the amount of the original loan, plus interest, court costs and other penalties. You will be reported to national credit bureaus and have your credit rating adversely affected. Your income tax refunds may be withheld and up to 15% of your wages can be garnisheed to collect the debt. If you are receiving Social Security, the federal government may withhold a portion of your benefits to pay your loan debt. Finally, your school records will be impounded and you will be prohibited from receiving any federal student aid at any school you wish to attend until the default is resolved.
Learn more about how to avoid the consequences of default at the U.S. Department of Education’s Understanding Default website.
