There are serious penalties for not repaying your federal loans
If you are unable to repay your loans, the federal government has the right to pursue the following actions:
- Require you to immediately repay the entire unpaid amount of your loan
- Sue you, take all or part of your federal and state tax refunds and other federal or state payments, and/or garnish your wages so that your employer is required to send the government part of your salary to pay off your loan
- Require you to pay reasonable collection fees and costs, plus court costs and attorney fees
- Report your default to national consumer reporting agencies (credit bureaus), which can have a negative impact on your future financial goals
As a result of not repaying your loans, you may also:
- Be denied a professional license
- Lose eligibility for other federal student aid and assistance under most federal benefit programs
- Lose eligibility for loan deferments