What are the actual consequences of falling behind on student loan payments? 

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Depends how far behind. Eventually it can lead to a judgement against you and wage garnishment. Getting a judgement against you is very, very bad.

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Yea, having a judgment against you isn't something you want to do. That being said, I don't know how quickly this would happen. It would have to go to collections for quite a while, and then probably a negotiated settlement, before this happened

Bad credit. Goodbye 700 credit score.

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Correct, once you get 90 days behind.

Right now federal loans aren’t reporting late payments for 12 months. Eventually if you don’t pay them they will be charged off and remain on your credit report for 7 years as bad debt. If you were going to get tax returns the gov will likely keep it to pay toward your balance. You also won’t qualify for any sort of government backed loan with federal student loans in bad standing (example- VA or FHA mortgage).

Late payments on private loans can be worse. The big companies will take you to court, and it will kill your credit for a very long time.

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I've heard of someone recently who had federal loans go into collections, and then she went to court over it and got them completely written off. She must have had to file bankruptcy and taken a huge hit to her credit score, but she doesn't talk about that part and seems to be fine with it. Would not recommend though!!

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Additional Posts in Student Loans

In a perfect world how much would you want to make a year to both pay off your loans and live a good life? I think I'd need to make upwards of $200k to pay off my loans, take care of my family and live a fulfilling life.

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If you could go back in time what would you tell yourself before taking out student loans?

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If you didn't have to pay off any more of your student loans what would you use the money for instead? I'm stuck between something impractical like a trip somewhere or something I need like a new car lol

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SOFI or who else?

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Are you doing what you thought you would be when you took out your student loans? If so, do you feel like taking out your loans was worth it?

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Can grad students get $20k forgiven if they got Pell in undergrad but outstaning loans are only for grad school?

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I have a 25K loan from my MBA. I paid off 100k whole, after graduation. 3 years ago, I moved my loan from federal to private ( SOFI) account. I recently lost my job. I have applied for unemployment, as the severance that I received will only cover for 2 months. Together my husband and I used to make less than 250k after tax. Now, with a loss of pay , we are going to make less. Do you think I will be eligible for Loan forgiveness?

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