What are the consequences of defaulting on student loans?

Defaulting on student loans can have serious consequences in New Mexico and across the United States. Federal and private student loan lenders can take a number of steps to collect the money they are owed, such as calling a borrower multiple times, garnishing their wages, or using the legal system to pursue collection. Failing to pay student loan debt can also negatively affect a borrower’s credit score, making it more difficult to obtain credit in the future. Additionally, the government may take your tax refund or a portion of your Social Security income for defaulted student loan debt. The Department of Education may even take legal action to collect the money they are owed. This could include filing a claim in court or requesting a judgment from a judge. The loan may not be forgiven due to the borrower’s death or bankruptcy and the debt must be paid even if a borrower moves out of state. Defaulting on student loan debt can have major financial implications, so borrowers should make sure they do not default on their student loan. If a borrower is struggling to pay their loan, they should contact their loan servicer to discuss alternative repayment options or loan forgiveness programs.

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What are the consequences of defaulting on student loans?

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