Is there a key difference between defaulting on student loans and defaulting on all other types of loans?
I am actually one of the lucky ones who does NOT have student loans, but I am curious nonetheless.
The way I see it is this:
If I don't send in my mortgage payments, the lender can foreclose on the house.
If I don't make my car payments, the lender can repossess the car.
If I don't pay my credit card bills, my credit card companies can send it to collections and cancel my cards.
But if I defaulted on student loans, can the lender repossess my education or cancel my degree?
- Anonymous7 months ago
there is no defaulting on government subsidized student loans it never expires and as long as you do not pay it you have a lean on your name... meaning you cannot buy a home and other things
private companies eventually "write off" the debt so they are not forced to pay tax on the money they never collected.
Government does not pay tax and excludes them selves from laws.
- SlickterpLv 77 months ago
No, but most student loans are government subsidized, so they can just take your tax refund until it's paid.
- Anonymous7 months ago
7 years bad credit and wage garnishment is plenty.
- babyboomer1001Lv 78 months ago
No difference. Defaulting on a loan is defaulting on a loan. The repercussions are the same. Bad Credit. Sued. Judgment. Debt. Garnishment. Embarrassment. Public Record. More embarrassment, and cannot get another loan in the future until this one has been paid off. Even for buying a house. You are screwing yourself.
- What do you think of the answers? You can sign in to give your opinion on the answer.
- oklatomLv 78 months ago
Student loans are government loans. This means you tax refund can be withheld, you can not get rid of the debt through bankruptcy, things like that.
As debt levels rise, creditors are taking increasingly tough actions to chase people who fall behind on student loans. The main threat that students now face is states going after their professional licenses.
According to the New York Times, government agencies in 19 states can seize state-issued professional licenses from residents who default on their educational debts.
Three states, Montana, Iowa and Oklahoma, include driver’s licenses within the scope of licenses that may be suspended for a failure to repay federal student loans. Additionally, there are 14 states that can block the renewal of any professional license for borrowers who are in default on federal and/or state student loans, including New Jersey. Many of the state laws specify which occupations fall under this law, such as attorneys, barbers and cosmetologists, correctional officers, dentists, marriage counselors, pharmacists and social workers. They even name debt collectors as one of the occupations that can fall under this law.
Though this has just recently come to light, this law isn’t new. Some of these laws have been on the books since the 1990’s, according to Bloomberg News. Public records requests by The New York Times identified at least 5,400 cases in Tennessee alone in which licenses were taken away or put at risk of suspension in between 2013 and 2017. Hailey Lara (‘21) says that, “If you can’t go to work and it costs you more in taxi/bus fares to get there so you have even less money to pay them.”
- StephenWeinsteinLv 78 months ago
No, they can't do that; it's much worse.
They can send it to collections and take almost anything you own or earn, including wages and even disability benefits (disability benefits can't be taken for any other type of debt except child support and student loans).
- MaxiLv 78 months ago
No however depending on where you live in the world they can sue you to get the money or like in many places it is tied into the tax system and once you earn x amount or more they take out x amount of money to pay off the student loan...