financing your dream
What Happens If You Default?
If you don’t repay your student loans, this can lead to serious consequences, such as unexpected collection calls and fees, wage garnishment, or loss of tax refunds. When is a loan considered to be in default?
- If it’s more than 270 days overdue
- If it’s more than 75 days overdue
- If it’s more than 30 days overdue
“A” is correct, provided you haven’t arranged for deferment or forbearance. Default stays on your credit history indefinitely and may ruin your credit score. It leaves you ineligible for deferment, alternative repayment plans, new student loans or grants. These consequences may also affect parents if they co-signed on the defaulted loan.