This Is What Happens When You Default on Your Student Loans

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In 2015, 68 percent of college graduates had an average of $30,100 in student loan debt, according to the Institute for College Access and Success. If you have student loans, you’re likely putting a chunk of money each month toward paying them off. You should keep paying them off to avoid the serious consequences that result from defaulting on a type of loan.

Here’s a look at what it means to default on student loans and what happens when you do. Understand the ramifications of going into student loan default, and figure out a way to pay off your student loans to avoid the damage that comes with defaulting.

What Does Defaulting on a Loan Mean?

Default by definition means you stop making payments on a loan for a certain period of time. That period of time is 270 days for student loans, after which you are considered in default.

Failure to pay your loans without negotiating a payment plan can cause serious repercussions; it could negatively impact your credit score and result in wage garnishment.

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The three-year federal student loan default rate was 11.3 percent — even for students who entered repayment programs — during 2012 and 2013 fiscal years, according to the U.S. Department of Education. Don’t become a statistic — make your student loan payments a priority or one or more of these things could happen to you:

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Learn: 8 Best Student Loan Repayment Plans

Getting Out of Student Loan Default

Whether you have Navient student loans, Wells Fargo student loans, private student loans or others, read your loan agreement for details about default consequences. Your loan provider might outline ways to set up a repayment plan and provide resources to help you avoid default.

If you do default on your federal student loans, take immediate steps to restructure your payments or settle the debt so it doesn’t impact your credit. Or, consider requesting a loan forbearance. A student loan forbearance suspends your payments for a period of time so you can reorganize your finances and figure out how to pay them.

If you’re in default there are ways to get out of it. Consider these five options:

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