If you fail to make payments on your student loan according to the terms of your promissory note, you will default on your loan(s). Your school, the bank or lending institution that made or owns your loan, your loan guarantor, and the federal government will pursue you for the money you owe. Here are some consequences of default:
A defaulted student loan can be rehabilitated, consolidated, stretched out, or discharged due to disability, but cannot be discharged in bankruptcy. For more information and to learn what actions to take if you default on your loan(s), see the Department of Education’s Default Resolution Group Web site.