Consequences of Non-Payment

There are serious consequences to missing loan payments. Always contact your lender if you are having difficulty making your payments.


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If you miss loan payments, you should know that the loan will be considered delinquent once a payment is late, meaning that the late payment may affect your credit report.

After being 270 days late in paying your federal student loan, the servicer assumes you will not pay and places your loans in default. Default is a serious situation that also harms your credit, and the penalties don't stop there:

  • Your wages and tax returns may be garnished.

  • You could also be sued for repayment and legal fees of the lender, and you may be subject to other debt collection methods.

  • You are no longer eligible for deferment, even if you would otherwise qualify.

  • The repayment schedule may be accelerated compared with the original repayment plan.

  • You may become ineligible for further education loans.

Private/alternative loan lenders may have different timelines for when they consider you to be in default. You should check with your lender for details.

If you are experiencing financial difficulties, do not wait until you are delinquent - call your lender or servicer as soon as possible to discuss what arrangements can be made to keep your account current.

One strategy to consider is automatic payment, in which your monthly payments are automatically withdrawn from your checking account each month. This strategy makes it less likely that you will miss the occasional missed payment, and can be useful throughout the life of your loan.

Remember, you are responsible for making payments whether or not you receive a statement in the mail.

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