What Happens If You Don’t Pay Student Loans?

If you're one of the many millions of graduates saddled with debt, it's understandable that you have some anxiety about paying off your loans.

This Post will cover what happens when you stop paying your student loans, and why you should never go into default on your loans.

What Happens If You Don't Pay Student Loans for 90 Days?

You are considered “delinquent,” and it will be reported to all 3 major credit bureaus. (The same thing happens when you don't pay your credit card for 90 days.) This can really ruin your credit.

After 270 days you are now in “default” and that's when it gets hairy. Your lender will put you in “collections,” which basically means that an agency will constantly call you and send you threatening letters to try to collect money.

What Happens If You Don't Pay Student Loans for 270 Days?

Here is a list of some of the actions the fed can take to punish you for defaulting on your student loans:

1. Contact your employer and garnish part of your paycheck — up to 15%! 2. Take your federal and state income tax refund

3. Take away your social security retirement and disability payments — up to 15% 4. Take away lottery winnings 5. Deny you an FHA or VA mortgage 6. Prevent you from renewing your professional license

Here is a list of some of the actions the a private lender can take to punish you for defaulting on your student loans:

    1. Sue you (you must show up for court or you could be arrested) 2. Garnish your wages 3. Seize your assets

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