Defaulting on a Loan
If you don't pay back a loan according to the terms in your promissory note, you may be in default. Default occurs when you fail to make a payment on your loan when due or fail to comply with other terms of your promissory note.
If you default on any federal student loan, the federal government may take some serious actions against you. You might:
- lose wages and tax refunds (both of which may be withheld and applied towards your unpaid loans)
- lose eligibility for additional future student aid
- be unable to get loans from any other source for purchases like a home or car
- lose job opportunities, or be unable to obtain a professional license
- have your defaulted loan reported to national credit bureaus, and your credit rating may be damaged