What Can Happen if You Don't Pay Your Student Loans Back?
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Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.
Student Loan Delinquency
Student Loan Default
Student Loan Collections
Consequences for Not Paying Student Loans
Credit Score Impacts
Loss of Loan Benefits
Tax Refund Withholding
Social Security Garnishment
Suspension of Driver’s or Professional License
Can You Go to Jail for Not Paying Back Student Loans?
Ways to Make Your Student Loan Payments More Manageable
Student loan forgiveness: Student loan forgiveness programs, such as Public Service Loan Forgiveness, are available to eligible federal student loan borrowers. You must make 120 qualifying payments toward your federal loans, and meet the program’s other eligibility and employment requirements. Student loan deferment: Loan deferment temporarily pauses your required monthly payments. During this time, your loan will accrue interest, which is capitalized. Learn more about this repayment relief option in our student loan deferment guide. Student loan refinancing: A student loan refinance repays your original student loans, and creates a new loan. It can allow you to secure a lower interest rate. Or, it could offer a lower monthly payment by extending your repayment term; however, this means you’ll pay more toward your debt in the long-run. Always weigh therisks and benefits of refinancing a student loan based on your unique student debt situation. Income-driven repayment plans: Federal loan borrowers can request one of four income-driven repayment plans, which can reduce your monthly payment to as low as $0 if you’re eligible. Since terms are either 20 or 25 years, you’ll pay more interest over the life of your loan, but have lower monthly payments.
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