Q: What happens when I default on a student loan, and how do I get help for a student loan that I have defaulted on?
A: If you default on your student loans, the student loan lender will likely accelerate your payment structure making the total amount of the student loan due in full and immediately. You will no longer be eligible for any type of student loan deferment or forbearance on the student loans you currently have. Should you continue to fail to take any action on your defaulted student loans, there will be additional consequences to your credit profile.
The long-term consequences for defaulting on a student loan will most likely include (but are not limited to) garnishment of your wages, offset of your federal and/or state income tax refunds as authorized by law, and losing your eligibility for other federal loan programs such as FHA or VA.
If you have defaulted on your student loans, there is certainly assistance available, and there is a way out of student loan default. The key to repairing a student loan default and minimizing any related consequences is taking action as soon as possible. Doing nothing about your student loans in default is only going to make your current situation worse.
All guaranty agencies and the U.S. Department of Education will accept regular monthly payments that are both reasonable to the agency and affordable to you. If you have federal student loans in default you need to call 1-800-621-3115, explain your situation, and set up a repayment plan that works for you. If you have private student loans in default, you will need to contact your lender immediately to review your options.
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