Your loan may eventually go into default
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Are You struggling to pay off your student loans?
If you are struggling to pay off your student loans, depending on the source there may be multiple repayment consolidation plans available. Interest accrual and payments on Federal student loans have been halted until August 2022. Delinquency refers to a payment that is late, and this status elevates to default after 270 days.
What happens if you default on a student loan?
In most respects, defaulting on a student loan has exactly the same consequences as failing to pay off a credit card. But in one key respect it can be much worse. Most student loans are guaranteed by the federal government, and the feds have got powers that debt collectors can only dream about.
What happens to my student loans after I graduate?
If you took out federal Direct Subsidized, Direct Unsubsidized, or Federal Family Education (FFEL) Loans, you have a six-month grace period that starts right after you graduate. During the grace period, you don鈥檛 have to make any payments on your student loan debt. This is a time for you to graduate, find a job, and begin to earn money.
What happens if you don’t pay a loan on time?
The borrower can be sued and taken to court for non-payment. Once an unpaid loan starts moving through the court process, the judge may issue certain orders. Although a borrower cannot be arrested solely for non-payment of a loan, an arrest warrant can be issued if a judge’s orders are not followed.