Consequences of Defaulting on Your Student Loans
Tough financial times are just that, tough. When you are facing tough financial times, it is easy to put your student loans on the back burner, in hopes you can resume payments quickly. Before you make the decision to let the payments go, consider the negative consequences of defaulting on your student loans.
When you default on your student loans several negative things can happen. The status of your student loans are reported to the major credit bureaus, which can cause your over-all credit score to drop. Debt collectors are quick to pick up these loans and can have aggressive debt collection practices. In some instances, your academic transcripts are withheld, which can hinder you getting that dream job. Then there is the dreaded litigation consequence, 90% of student loan debt collection lawsuits result in default judgments.
Adam S. Minsky, Esq. established the first law firm in Massachusetts devoted entirely to assisting student loan borrowers, and he remains one of the only attorneys in the country with a practice focused exclusively in this area of law.
In this CLE class video clip, Adam explains the consequences of defaulting on your student loans.
You can watch the complete Student Loan Debt Law CLE class here:
Student Loan Debt Law CLE
Defaulting on federal student loans can cause a whole new list of problems. You can not acquire any future federal loans, while you are in default of your federal student loan. Collection fees up to 25% of the total loan balance are common. Your tax refunds are subject to interception and an offset of federal benefits including Social Security. You can also be faced with administrative wage garnishment.
Secondary consequences of you defaulting on your student loans are, the inability to complete unfinished degrees. In some cases, you can experience difficulty securing stable housing, or stable employment. If you have a professional license, that to might be in jeopardy.
There is no statute of limitations for student loan debt, so dealing with this is a must for every student loan borrower.