A Federal Stafford Loan goes into default status when a student fails to make payments according to a prearranged schedule. The lender may require immediate repayment of the loan for the full amount.
Students face repercussions for defaulting on the Federal Stafford loan, which may include: wage garnishment, collection costs and an offset on federal or state income tax refunds. A student loan in default may also negatively affect a student's credit score.
Students may regain eligibility to apply for a Federal Stafford Loan by removing the default status of a previous loan in one of the following ways. A student can pay off the loan amount in full or make prearranged payments for six consecutive months. Students also may be eligible to participate in the FFEL loan consolidation program or the William D. Ford Direct Loan Program. Additionally, a student may participate in a loan rehabilitation program.