What Happens When You Default On Student Loans? | Student Loan Planner

What happens when you miss a student loan payment? Or more than one? Can you get in trouble? Possibly. You put yourself at risk of student loan default.
Here’s a closer look at what happens when you default on your student loans and how can you get out of it.
Blog post with more info on this topic: www.studentloanplanner.com/st...
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[@protectorofillinois3]

My total student loan debt was $30,000 and I was on an income-based repayment plan because I worked part-time (the repayment amount was pretty resaonable), but because I had a stroke, I wasn't able to return to work, so I'm so happy I was able to have the student loan discharged because I get SSI (which is a needs-based program that cannot be garnished to pay back student loans under any certain circumstances).

[@VideoCreep]

Hey man I really appreciate the video! Mine says this can it has me so confused. Does this mean I’m in the clear? “Current, was a collection account, insurance claim, government claim or terminated for default”

[@connorboard1295]

Hi Travis! My dad had several Parent Plus loans which he consolidated into a direct consolidation loan a couple years ago. As you know, he is now stuck with the ICR payment plan which gives him a payment that is not affordable at all. Sadly, I just watched the double consolidation loophole video for Parent Plus loans today, but it’s too late for that. As I read the consolidation loan application I see you are not allowed to apply for consolidation of a single direct consolidation loan without adding another eligible loan. Is there any other ways he can get to one of the income repayment plans that are based on 10% instead of 20% of discretionary income? Thanks!

[@StudentLoanPlanner]

This might change in the future, but no, he can't access anything other than ICR if he's already consolidated everything together unless he has another kid going to college in the future.

[@whateverworks86]

hell yea

[@Paarthurnaxdova]

What if you just never pay? Once it goes to a collection agency doesn’t it go away after that?

[@StudentLoanPlanner]

There are consequences when you don’t make payments on your federal student loans, up to defaulting on your loans. If you don’t make payment arrangements, your loans may be turned over to a collection agency. If the collection agency is unable to collect payments from you, the next option is wage garnishment. The Department of Education uses this as a last resort after exhausting other alternatives. Private lenders typically have to take legal action against you to garnish your wages, as they can’t force your employer to garnish wages without a court order. Some states don’t allow garnishment on private loans at all. Learn more here: www.studentloanplanner.com/student-loan-wage-garnishment/

[@tnnsboy18]

What this fool isn't telling you is that once it goes to a collection agency, you can ACTUALLY settle the student loan debt and you can actually pay 1/4 of your balance. Or maybe less. BUT your credit will take a ding, but it will be paid off and closed. So don't let his eyebrows tell you anymore lies! He's obviously working for the student loan companies.

[@redslippersaloon]

True, and even if you get a wage garnishment, it’s only 15% of your takehome, on a mucher lower settlement, that isnt accruing interest. It’s far less, though your credit gets dinged.

[@redslippersaloon]

Ex: $20k student loan default, $30k after penalties. Collection agency gets the bounty, they take you to court, they get awarded say a $7500 settlement, and legally garnish your wages at 15%. You will only end up paying to $7500, far less than making payments on the original loan that is accruing interest.

[@Biggbootzz]

Thank you for this info. What happens if the student defaulted on the loan, and the 86 year old co-signer grandmother is being sued? 🫤