A student loan is defaulted when you fail to make your scheduled monthly payments or make special arrangements with your lender to suspend payments. Defaulting has serious consequences:

      • You can be sued for the entire amount of your loan.
      • The default will be reported to national credit bureaus, making it difficult to borrow money for a car or home, or to receive credit cards.
      • Federal and state governments will withhold tax refunds.
      • Your wages will be garnished.
      • You will become ineligible for any federal Title IV student aid unless you make arrangements to repay what you already owe.
      • You may become ineligible for assistance under most other federal benefit programs.
      • You will become ineligible for a deferment on your loan.
      • You will become ineligible for federal interest benefits.
      • You will be liable for the costs associated with collecting your loan, including court costs and attorney fees.
      • You may not be able to receive or renew a professional license.

Avoiding Default

Fortunately, default can be avoided. Strategies include:
      • Investigate all the options available to help pay your educational expenses including help from family, summer savings, and part-time jobs. You may also be eligible for grant, scholarship or work-study funds. A loan should be your last option.
      • Borrow only what you need.
      • Make your loan payments on time.

If you have problems making your monthly loan payments, don't panic. There are several options to help you avoid defaulting on your student loan, including deferments, forbearances and loan consolidation. But you must act, before the loan defaults. Contact a HESC Advocate Counselor to review your options at 1-888-215-0196 or loanadvocate@hesc.org