Default will trash your credit rating for years. So forget about borrowing to buy a car or a home. The agency that holds your loan could force your employer to deduct the payments from your paycheck. And, in addition to the money you owe, you could be liable for any expenses incurred to collect the loan. The U.S. Department of Education can ask the IRS to take that tax refund and apply it to the loan. And if you ever decide to go back to school, you can kiss any federal financial aid goodbye.
This dire scenario is easily avoided. Your lender doesn't want to see you default any more than you do. So if you're having trouble making the loan payments contact your lender. You may qualify for a deferment. For example, let's say you're unemployed or there's some other economic hardship. You may be able to defer your loan payments for up to 3 years. Even if you have defaulted, it still pays to contact your lender. There are ways to rehabilitate your loan. And remember, your lender doesn't want to punish you, they want their money back. And they'll work with you to achieve that outcome.
Tuition increased every year by
4.2% for public universities
4.8% for private colleges
…above the rate of inflation!
What are some future consequences of borrowing too much debt?
You have to make sure you have money to pay the loan back, but if you don’t you will go into default. When you go into default this destroys your credit. The default shows up on your credit, which you don’t want to happen. Having negative credit on your credit report could stop you from getting future loans. Some other consequences of borrowing too much and going into debt are: evictions, foreclosures, wage garnishments, emotional breakdowns, ruined credibility and undesirable credit. Debt affects people in different ways and has a major impact on the life of each person. It often determines how they will be able to live their lives....