What is Loan Default?
occurs when you fail to make scheduled payments on your student loan as outlined in your master promissory note.
Consequences of Defaulting on Federal Student Loans:
- Credit Damage: Your default will be reported to credit bureaus, harming your credit rating.
- Ineligibility for Aid: You will not qualify for further federal student aid.
- Wage Garnishment: Loan payments can be taken from your paycheck.
- Tax Refund Seizure: State and federal tax refunds may be withheld.
- Additional Costs: You’ll face late fees, collection costs, and potential legal action.
How to Prevent Default:
If you're struggling to make payments, to explore options like deferment or forbearance.
- : Temporary suspension of payments. Interest does not accrue on subsidized loans but continues to accrue on unsubsidized loans.
- : Temporary permission to stop payments. Interest continues to accrue on all loans.
Need Help?
For assistance with loan repayment, contact the .
Direct Loan Servicing Center: 800-848-0979 (TDD: 800-848-0983)
More Info: studentaid.gov