What are the consequences of defaulting on student loans?

Defaulting on student loans can have serious consequences in Wisconsin. When a borrower defaults on a federal loan, the loan is sent to the Department of Education’s debt collection agency, which will begin to collect the debt. The agency may garnish the borrower’s wages or put a hold on their federal income tax refund. Furthermore, their credit score will take a hit, making it difficult to get a loan or open a line of credit. Defaulting on a loan may also affect students in Wisconsin in more direct ways. They may be blocked from registering for classes or receiving their diploma until the debt is paid off. In addition, the college or university could take legal action against the student in order to collect the debt. The consequences of defaulting on student loans in Wisconsin are not to be taken lightly. It is important for borrowers to understand the consequences and to make sure the loan is in good standing before graduating. Taking the time to understand loan terms, repayment options, and loan consolidation can help borrowers avoid defaulting on their loan.

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What are the consequences of defaulting on student loans?

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