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Default Loan

A loan is considered in default if you, the borrower, fail to pay several regular installments on time (over 180 days late) or otherwise fail to meet the terms and conditions of your loan. If you default on a loan, the university, lender, state, and the federal government can take legal action to recover the money. This may include garnishing your wages or withholding income tax refunds. Defaulting on a government loan will make you ineligible for future federal financial aid and may give you a bad credit rating, unless a satisfactory repayment schedule is arranged.


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