The Threatening Consequence of Defaulted Student loan

The defaulted student loan status is a curse on a student’s careers. One hand the whole amount of the loan becomes outstanding and also the status snatches the opportunities of receiving added financial benefits like- federal student loan and deferment on student loan. This defaulted status impacts o the student’s personal as well as in professional life.

It eventually makes your credit score zero and damages the chances of extra credit package. Insurance companies or the lenders generally hand over your defaulted status to the government departments like the education department which takes strong measurements. It can permanently destroy your further financial helps and make you suffer like a prisoner without any sign of relief. The defaulted status projects some negative consequences which affects the student in their future life.

Withdrawal of Federal Benefits

The worst consequence of the defaulted student loan is that the government snatches your federal student benefits if you fall into the defaulted category and have escaped your given deadline. With this status, you begin to lose important federal benefits like- Social Security Disability benefits, the Social Security Retirement benefits and Direct Student Loan benefits. That development can be a big set back on your professional career. This withdrawal creates a huge hollow in the personal life as well. The chances of receiving a suitable job get reduced and the well earned reputation of yours gets lost. It comes hard for the co-signer and the elders as well.

Tax Refund Offsets

The next big negative impact is the collection of income tax refunds by IRS officers which you are allowed to enjoy. In most cases, the officers suspend the income tax refunds. This process of suspension continues until you pay back the entire loan amount. In another way it helps the government to receive the pending money. This is a great way to extract the outstanding money from the students and the department of education uses this technique every year to make benefits.

Paycheck Garnished

The crucial impact in a student’ professional life is the deduction of the 15% wages by the government each month if you have the defaulted status. The government generally directs the employer with legal notices about the 15% wage deduction. Therefore, the employer helplessly cuts the 15% wage and sends the amount to the related department. Unfortunately, you cannot even renew your well earned professional license till the total amount is fully paid.

Increased Chance of getting Sacked

This is one of the most dangerous negative consequences of the defaulted student loan. You can get sacked at any time and there basically is no generally time limit on sacking. The government sues you to get the remaining debt amount. Defaulted student loans are growing with each passing day. It is considered best to clear the debt as early as possible to avail helpful financial benefits.

About the Author:

The writer in this article has scripted the negative and impactful consequences of defaulted student loan. He further has written that the only way to get away from the consequences is to pay them as early as possible.

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