Defaulting on a loan means that you have not made any effort or made arrangements for repayment of the loan that was extended to you in order for you to attend college. Even if you’ve dropped out of school, have no degree, you are still responsible for the debt. There are many things that you can do, however, to work things out with your lender, especially if the student loan was a federally issued loan. You can get your student loan out of default.
Understand that by continuing to stay in default, it could impact you in many ways:
· It could make signing up for utilities or cable/internet an issue.
· It could prevent you from obtaining credit for a home or car.
· It could keep you from being eligible for cell phone service.
· It could negatively impact your ability to rent an apartment.
· It may interfere with the hiring process, depending on the job.
If you are in default, then don’t put off contacting your servicing agent. Most FAFSA loans are serviced by GreatLakes and they have a number of options for bringing the loan out of default. If it has gone to a collection agency, then contact them directly and work out payment plans based on income or ability. Default on student loans should be taken seriously.
More information on student loan defaults here.