Loan Default Status
If you are in default status, +it may be due to failure to make payments on your student loan, as scheduled according to the terms of your Master Promissory Note (MPN). The MPN is a binding legal document you signed at the time you took out your student loan. The consequences of being in default status are as follows:
- You will not qualify for any more federal student aid.
- Your entire balance of your student loan(s) can be due immediately.
- You may not be entitled for deferment, forbearance, or repayment plans.
- Your student loan(s) will be reported as delinquent to the credit bureaus. This will damage your credit rating.
- Your refund from federal and state income tax may be withheld to collect on your debt from defaulted student loan(s).
- Your debt from your student loan(s) will increase because of the late fees, interest, court fees, collection fees, attorney’s fees, and any other costs associated with the collection process.
- Your wages may be garnished through your employer.
To learn more about your Loans that are in a default status and clear your default status, you may contact your school, go to www.nslds.ed.gov or call 1-800-433-3243 to resolve this issue.