What happens if I default on my federal student loans?

If you default on your federal student loans, serious consequences can occur. The US Department of Education has the authority to take several actions to collect the overdue amount. They may garnish a portion of your wages, seize your federal tax refunds, and even take legal action against you. Defaulting also negatively impacts your credit score, making it challenging to secure loans, credit cards, or even housing in the future. It can also result in additional fees, collection costs, and accrued interest. To avoid default, it is crucial to contact the loan servicer immediately, explore repayment options such as income-driven plans, deferment, or forbearance, and establish a manageable payment plan. Stay proactive and keep communication open to prevent the severe consequences of defaulting on federal student loans.