More Consequences of Default

The problems caused by defaulting on student loans do not stop at the financial level. When a loan is in default:

• Your wages may be garnished. That means your employer will be told to withhold a portion of your paycheck to pay your loans.
• Your creditors may sue you to recover the money you owe.
• You are not eligible for deferment, forbearance, or additional federal student aid.
• You still have to pay back that loan eventually. The institutions to whom you owe money—the government, your guarantor, or a collection agency—will continue to contact you until you repay the money.

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