If a student falls behind on his or her regular scheduled payments that student is considered delinquent by their lender. There are potentially 8 serious consequences of defaulting on a student loan debt, and some of these are as follows;
1. Your defaulted loan is reported as a collection account to national credit bureaus. With a poor credit risk, you will find it impossible if not difficult to obtain loans of any kind.
2. Collection costs of up to 25% of your balance are added to your outstanding student debt.
3. You become ineligible for further financial aid until your loan is paid in full or you have entered a qualifying repayment agreement with EdFund.
4.Your school may even withhold academic transcripts.
5.Your individual Federal Income tax refunds may be withheld to repay the defaulted student loan.
6.Your wages may be garnished. Please click the following link below for
What is the definition of Garnishment of Wages?
7.Your loan may be assigned to a collection agency.
8.You lose the right to defer payment or to request a forbearance.
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