|5 things to Be Remember|
|The consequences of defaulting on a student loan are high and serious. Five things can affect you severely at once you default on your student loan. Here, is a look -
1. Garnishment of wages or Loss of Income tax refund
The Government holds the right to garnish your wage or seize your income tax refund in a bid to collect the outstanding amount.
2. Lawsuit initiated by the Federal Government
The Federal Government can also file a lawsuit against you for an indefinite period concerning the defaulted student loan in an aim to collect the amount.
3. Ineligibility for further financial aid
Defaulting on your student loan makes you non-eligible for any further loan grants or assistance from financial institutions.
4. High collection charges and penalties
Once you default, the federal government immediately imposes a default fee upon your student loans. In addition, the collection agency also charges an extra amount increasing your total balance greatly.
5. Poor credit rating
A defaulted loan always brings along a drop in your credit rating, which affects your personal, professional, and financial life greatly.