What are the consequences of defaulting on student loans?

Defaulting on student loans can have a variety of serious consequences. The federal government offers student loans to help students pay for their college educations. If students fail to make payments on their student loans, they are considered to be in default. The most immediate consequence of defaulting on student loans is that collection activities can begin. This means that the creditor can take several steps to recover the unpaid loan, such as wage garnishment, tax refund offsets, and denial of future federal student aid. Additionally, defaulting on student loans can harm a person’s credit score, making future credit more expensive. In Alaska, a person in default may also face civil or criminal action. In the most serious cases, a court may issue a judgment against the borrower, which may result in paying additional fees and court costs. Furthermore, once a loan is in default, it cannot be rehabilitated. The only way to get out of default is to pay off the loan in full. Defaulting on student loans can have long-term financial consequences that can last for years. It is important for students in Alaska to fully understand their student loan obligations and take steps to avoid default.

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What are the consequences of defaulting on student loans?

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