Defaulting on a Student Loan

Being in default of a student loan, or any loan for that matter, is considered, by lenders to be an act of irresponsibility. Loan holders who have not made payments for over 270 days are considered officially in default of their loan. It is an obligation for loan holders to repay the money lent to them. Most student loans are generally not discharged or cancelled under bankruptcy. Therefore, in the case of financial disparity, lenders will go to many lengths to collect money from loan holders in default.

Some of the consequences that default loan holders may endure include being reported to a credit collection agency and credit bureau, having part of their personal paychecks withheld for loan payments, having collection costs added to the outstanding loan, and being taken to court. Statistically, most loan holders who go into default are those who started school, but never finished their studies with a degree.