Defaulting on Your Student Loans

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What is default?

If you default on your loans, it means you failed to repay them. You are considered to be in default if you don’t make your scheduled loan payments for at least 270 days or about nine months.

What happens if I default?

Defaulting will hurt your personal credit rating and could prevent you from renting/buying a home, car, or other major purchase.  Defaulting could also make you ineligible for certain jobs.

Take a look at some of the consequences for defaulting on student loans:

  • You will no longer be eligible to receive financial aid for education.
  • Your loan may be sent to a collection agency.
  • Your total student loan debt becomes due in full – you won’t even have the option of making installment payments.
  • The defaulted loan is reported on your credit rating for up to seven years, lowering your personal credit score to a very low number.
  • Your employer could be ordered to garnish your pay to repay your loans; this means they could be required to take 15% of your salary and send it to pay off your loan.
  • The federal government will withhold any tax refunds from you and apply them to your loan balance.
  • You can’t join the military or the Peace Corps.
  • You can’t get a job as a government contractor.
  • In 22 states nurses, teachers, EMTs, lawyers, realtors, and more can have their professional licenses to work revoked.
  • You can’t move overseas.


You don’t want to be on the receiving end of this call…



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