The student loan debt most people incur while in college can be large. Most students focus on graduating. Many are willing to take on large debt to make that happen. Often, that means not thinking about ongoing financial obligations.

The worst choice is defaulting. If you do, there could be serious consequences. The details and terms of your loan will impact those consequences. You must make payments within 270 days to avoid defaulting on most federal loans. You might default on private loans by missing one payment.

Student loan default penalties can be severe

There are likely to be serious penalties if you default on your student loans.

They could include:

  • Acceleration. The balance of your loan could be due immediately. That includes interest.
  • Collections. Creditors could hire collection agencies. That could include more loan collection expenses.
  • Cosigner’s responsibility. The person that cosigned your loan could be forced to make payments.
  • Eligibility options. You might lose your chance for deferment, moderation and repayment options.
  • Lawsuits. Your loan holders could sue you.
  • Wage garnishment. The federal government could have a part of your pay held to cover the debt.

Defaulting can also be damage to your credit and your future

Your credit rating can be severely damaged when you default on student loans. It could take years to fix the issues. You might have problems getting car loans, mortgages and credit cards. It could lead to difficulties renting apartments, opening bank accounts and getting jobs. You will want to avoid those issues before they become big problems.

Many lenders will work with you to help you avoid default. That could mean lowing payments or stopping payments for a short time. There are also legal defenses available.