Student loans that are in default may be accelerated. This means that the loan holder may state that the entire loan must be fully repaid in a single payment.
If you have defaulted on a student loan, you are not eligible to receive future federal scholastic financial aid of any kind until agreed upon loan payments have been made for six consecutive months. Defaulted student loans may also affect your eligibility to receive FHA loans and VA loans.
If you default on a student loan, the government may order your employer to calculate and garnish 15 percent of your disposable wages. Any tax refunds you are entitled to may also be taken to repay defaulted student loans.
Defaulted loans that are sent to a collection agency may accrue collection costs in addition to balances and interest. If your lender takes you to court, you may have to pay all court costs in addition to your lender's attorney fees.
Defaulted federal student loans may appear as a negative mark on your credit report for seven years from the date they are reported. To improve this blemish you can pay off or consolidate the loan, and the only way to remove the mark completely is to complete the Federal Student Aid rehabilitation program.