Default

If you fail to make your payments for six months or more, your loan will go into default. Defaulting on a loan is a serious matter. When the student enters default, the student will immediately become ineligible for any Title IV funding at any school. In the event of default, your guarantee agency purchases the loan from your lender and begins collection activity against you until the loan has been repaid. This activity may include, but is not limited to:

• Reporting your default to a credit bureau.
• Reporting your default to the Internal Revenue Service, causing your federal tax refunds to be withheld and applied toward your loan balance. Many states also withhold state income tax refunds.
• Garnishing your wages.

If you are having difficulty making your payments, contact your lender or guarantee agency immediately. Many problems can be resolved, and there may be deferment or forbearance options available to you.