Consequences of Default

Defaulting on a student loan can have serious consequences, including any or all of the following penalties:

• Steep collection costs added to your balance

• Referral of your account to a collection agency

• Entire unpaid balance is due and payable

• Wage garnishment

• Withholding of state taxes or federal treasury payments, including Social Security benefits

• Loss of eligibility for further federal financial aid (e.g. federal Pell Grant, federal Direct Loan)

• Loss of deferment or forbearance entitlements and flexible repayment options

• Negative impact to your credit score for up to seven years

• Loss of professional licenses

• Denial of employment by a government agency

• Hold placed on your official college transcript

• Civil lawsuit filed against you, with liability for court cost and/or legal expenses