Don't Default!

Info For Graduate Students

It is important to always make your scheduled payment on time to your loan servicer.  There are serious consequences if you don’t make the full scheduled payment or if you don’t make the payment on time.  You will be placed in a "Delinquent" status and eventually, you could be placed in "Default". 

Default means you failed to make payments on your federal student loan(s) according to the terms of the promissory note (legally binding document) you signed prior to borrowing the student loans.  Some of the consequences of default are as follows: 

  • Harm your credit rating, making it hard for you to buy a car, house, obtain credit cards, etc.
  • Will not be eligible for additional federal student aid if you decide to return to school.
  • Wages may be garnished, meaning the loan payments can be deducted from your paycheck.
  • State/ federal income tax refunds can be withheld and applied toward repaying your loan.
  • You may be charged late fees and collection costs.
  • You can be sued.
  • You may not be hired by an employer that performs credit checks.

If you have trouble making payments, make sure you keep in contact with the servicer of your loans.  Your servicer may be able to offer you options to keep you from going into default. 

Servicers can look at the different Repayment Plan options to see if your scheduled payment can be reduced.  For more information about the repayment plan options, visit the U.S. Department of Education's Federal Student Aid website and select "How to Repay Your Loans".