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What is Default?

Definition and Consequences of Default

Definition of Default: Delinquency occurs if you fail to make payments on your loan(s). If you are 270 days delinquent, your loan(s) are considered to be in default. If you fail to make scheduled payments on your student loan debt, or it is determined that you have no intention of honoring the terms of the promissory note your loan(s) will default and your lender will then file a claim with College Access Network for reimbursement of the outstanding loan balance. College Access Network will continue to pursue payment of your loan.

Consequences of Default:

  • The default is reported to all credit bureaus which will damage your credit rating

  • Generous repayment schedule and deferment options are lost

  • Federal and state tax refunds may be seized

  • Wages may be garnished

  • Loss of eligibility for other student aid programs until suitable arrangements for repayment are made

  • The entire balance, plus collection fees assessed to the account will be owed

  • You can be sued for the balance of your loan

  • Loans may be assigned to a collection agency

  • You may not be eligible for certain state and federal jobs

  • You may experience credit problems and become a poor credit risk

  • Problems may occur with securing collateral, cure periods, foreclosures and mortgage insurance denial

  • The borrower's school may withhold academic transcripts

Student loan default has serious and possibly long-term consequences.


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