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If you default on a student loan, what happens? Unfortunately, more Americans are finding out the answer first-hand.
Student loans now have the highest delinquency rate of any consumer loan, higher even than car loans or credit cards, according to Bloomberg Businessweek. Many of those student loan delinquencies -- i.e., missed payments -- will lead to student loan defaults.
Default occurs when a borrower continues to miss payments on a loan. For federal student loans, for example, default is when no payment has been received for 270 days. At that point, a lender like the Department of Education may take steps to collect payment.
There are several ways this can happen. For example:
The above isn't an exhaustive list of all the methods lenders can use if you default on your student loans. If legal action against you has already commenced, you may want to consult an experienced collections lawyer. To learn more about avoiding default and other options available to you, check out FindLaw's section on Student Loan Relief and download our free Guide to Student Loan Debt.
Meeting with a lawyer can help you understand your options and how to best protect your rights. Visit our attorney directory to find a lawyer near you who can help.