Why you should avoid default
Your loan is in default if you don't make monthly payments for 270 days. These are the consequences you may face:
- You lose federal and state income tax refunds.
- You lose other federal or state payments.
- Legal action can be taken against you.
- You can be charged collection costs (including attorney fees)
- You may lose your professional license.
- The interest rate may increase.
- You lose eligibility for other student aid and assistance under most federal benefit programs.
- You lose your eligibility for student loan deferments.
- Information about your loans will be reported to national credit bureaus and hurt your credit rating.
- Your employer may be required to take part of your wages to pay your student loan (wage garnishment).
Get out of default by paying off your student loan or rehabilitating your loan by making 9 payments, within 20 days of your due date, over 10 months. The payment amount must be approved by NSLP.
Contact your lender or NSLP Customer Service to discuss which repayment, deferment, or forbearance options are best for you.
