The honest truth is that in most cases, if you stop paying your student loans, they will not go away. Not only will your debt continue to grow with accrued interest, late fees, and additional collection costs, but you will also face the following consequences if you ignore your student loans:

1. You’ll damage your credit score. You damage your credit score when you miss student loan payments, which can prevent you from buying a car, getting a credit card, renting an apartment, and owning a home. Once this happens, it will take years to reestablish your credit and raise your score again.

2. Your wages may be garnished. Once you have failed to make a payment on your federal student loans for 270 days, the loan will be considered in default. At that point, the government has the power to garnish a portion of your income to collect what you owe.

3. You may be sued. As private loan lenders don’t have the same collection powers as the federal government, they may sue you in court to collect what you owe. If this happens, you’ll need to hire an attorney to help you fight the lawsuit.

4. You may lose your tax refund. If you default on your federal student loans, the government may seize your tax refund to pay off a portion of your debt. This is not the case if you default on private student loans, as private lenders don’t have the power to take your tax refund.

5. Your co-signers will be held accountable. If you default on your student loans, any co-signers on the loan will be held responsible for your debt. The creditors will contact them and their credit score will also suffer.

6. In many cases, you will need to deal with your debt indefinitely. As there is no statute of limitations on federal student loans, the government can attempt to collect your debt forever. It will always be hanging over your head – no matter how long it’s been since you defaulted. However, with private student loans, there are state statute of limitations that prohibit private lenders from attempting to collect the debt indefinitely.

No matter which way you look at it, ignoring your student loans is not a smart move to make. If you’re having trouble making your payments, take steps to deal with the problem proactively.

If you have federal student loans, look into the government’s income-based repayment program, which allows you to adjust your monthly payments based on your income.

If you have student loans (federal or private), look into student loan refinancing and consolidation through our platform before you go into default. As long as you have a good credit score, you could qualify for a lower interest rate and a lower monthly payments, making it easier for you to pay what you owe and get out of debt. Because all of our refinancing loans are funded by credit unions and community lenders, you’re likely to save thousands on your existing student loans.

Please note that the information provided on this website is provided on a general basis and may not apply to your own specific individual needs, goals, financial position, experience, etc. LendKey does not guarantee that the information provided on any third-party website that LendKey offers a hyperlink to is up-to-date and accurate at the time you access it, and LendKey does not guarantee that information provided on such external websites (and this website) is best-suited for your particular circumstances. Therefore, you may want to consult with an expert (financial adviser, school financial aid office, etc.) before making financial decisions that may be discussed on this website.