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Consequences of Default

If a borrower fails to repay his/her student loan on a timely basis, he/she will be considered in default and may encounter the following consequences:
  • Reporting to national credit bureaus, which may cause a negative effect on the borrower's credit rating
  • Assessment of late charges
  • Restriction of access to institutional records
  • Loss of entitlements to cancellation and deferment
  • The borrower may be ineligible to receive additional federal or state financial aid
  • The entire unpaid balance of the loan, including interest, may become immediately due and payable
  • Placement of the loan with an attorney or collection agency. Costs associated with the collection of any loan will be added to the amount owed
  • The borrower may be sued to force payment and may be liable for court and attorney fees if judgment is not in the borrower's favor