Defaulted students loans typically stay on your credit report for seven years unless you take action. The defaulted status can be removed by completing a loan rehabilitation program or by paying off the loan.
Defaulted students loans may have negative consequences. Tax refunds may be confiscated and applied toward the loan balance. Also, your wages may be garnished.
Payment plans are usually available to help make student loan payments manageable. Payment plans may allow payments to be adjusted according to your income or may allow you to make smaller payments for a set number of years as you start out your career.
A loan rehabilitation program usually involves making nine consecutive monthly payments voluntarily to the student loan lenders. Once the criteria is met, the loans will no longer be in default.
Students loans may be cancelled as a result of total and permanent disability and death. Students loans are very difficult to cancel otherwise. Even bankruptcy does not typically cancel student loans.