Got a student loan that you don’t feel like paying? Too bad. It’s not worth the damage to not just your credit, but your entire life: It’s humiliating, you can potentially get arrested, and you’ll almost never be able to get a mortgage, credit card, or car loan as long as you’re defaulting. Here are just a few of the consequences of what happens when you don’t pay your student loans.
You’ll fall further and further into debt. Just because you don’t feel like paying your loans doesn’t mean that interest won’t grow. The balances that seem huge now will only get even bigger, and if those loans have to go to collections, depending on where you live, you may incur collection costs on top of the interest than go up to 25 percent of the balance. Uh, yikes.
Your credit score will be abysmal. If you skip payments (or even just pay a little late), they’ll appear on your credit score for up to seven years.
You’ll default. If no payment has been made on a federal loan for 270 days, the government considers it a “default.” What happens then?
Uncle Sam can garnish your wages. If you default on a federal student loan, the government can garnish up to 15 percent of your wages.
You’ll lose your tax refund. If you default on a federal student loan, that refund money can go right back to Uncle Sam instead of going to your pocket.
Your spouse can lose their refund too. If you’re married and filing jointly with your spouse and you default on a federal student loan, your husband or wife may suffer from their refund too. (Ladies, please, get a prenup.)
You’ll screw over your co-signers. If anyone was stupid enough to co-sign a student loan for your deadbeat ass, they’re on the hook for the entire balance. Don’t do that to them.
Scary men may come to your door. If you default on a student loan, U.S. Marshals and cops may come to make you pay.
It won’t go away. There’s no statute of limitations on federal loans. State laws may apply to private ones, but that won’t mean debt collectors won’t try indefinitely to get the money from you, so at least read up on the laws where you live if you’re going to be a freeloader from the American taxpayers.