Stafford Loan Default

If you do not repay your Stafford student loan on time, your loan will become delinquent. If you continue to neglect your Stafford loan repayment by not bringing your account to-date you could be faced with Stafford loan default.

This has serious consequences and can be very damaging to your credit rating. Since defaulted federal student loans are reported to all national credit bureaus, you may experience some of the following consequences:

• The entire unpaid amount of your student loan, including interest, will become immediately due and payable.
• You may be liable for additional collection costs.
• You may lose future eligibility for federal or state financial aid and/or student loans.
• The references you supplied on your loan application may be contacted in effort to locate you.
• You may lose deferment and forbearance options.
• Your federal and state tax refunds may be withheld and applied to your loan balance.
• Your Illinois professional license renewal may be denied.
• Your employer may withhold part of your salary for payment of your loan.
• Your loan may be referred to a collection agency.
• Legal action may be taken against you.
• You will still have to repay your federal student loan!

To help you manage your student loan debt, and to repay your Stafford loan, stay in touch with your lender. You should also read any mail you receive regarding your loan, keep records in a safe place, stay current with your payments, and write your loan account number on all correspondence.

If you are unable to make your monthly payments, consider your repayment options. Depending upon your circumstances, you may qualify for federal student loan deferment or forbearance.