Q: Can I get a student loan if I defaulted on a federal student loan that I currently have? I have a student loan in default, but plan on returning to school, and will need a student loan to help pay for the costs.
A: Defaulting on student loans can have a number of different consequences, one of which can be becoming ineligible to receive any more federal financial aid (including federal student loans). In addition to becoming ineligible to receive federal financial aid for college, defaulting on student loans can cause an individual’s credit score to be damaged for years into the future, an individual’s wages to be garnished, an individual’s tax refunds to be intercepted, collections to be initiated on the individual, and/or more. Defaulting on student loans has such a negative impact on an individual’s financial situation, that it should be taken very seriously and avoided at all costs.
If you have defaulted on a previous student loan, you will not have the ability to secure another federal student loan until the default on your previous student loan has been addressed. Typically, individuals will have to repay the defaulted student loan in full, or have an agreed upon repayment plan in place before they may be eligible for federal financial aid once again. If an individual has a repayment plan in place to repay the amount owed on the defaulted student loan, they will likely be required to have a minimum of six consecutive and timely monthly payments made towards the defaulted loan before they may be eligible for federal financial aid once again.