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  • What does it mean to be in default?
  • What are the consequences of default?
  • What can I do to get out of default?
  • Where can I find my loan information?
  • Who can I talk to about my situation?


Default FAQs Click here to learn more!








































:: What Are The Consequences of Default? ::

Defaulting on your student loan can result in many negative consequences, including:

  • Garnishment of your paycheck. To pay your student loan debt, Administrative Wage Garnishment (AWG) allows up to 15 percent of your wages to be garnished without a court judgment and up to 25 percent of your wages with a court judgment.

  • Loss of federal and state tax refunds. State and federal tax refunds and other federal payments may be taken and applied to your defaulted student loan account.

  • Loss of deferment and forbearance eligibility. Loan default disqualifies you for deferment and forbearance options. Under normal conditions, your lender may be able to lessen or suspend your payment for a short amount of time to meet your needs.

  • Ineligible for student aid. From the date of default, you're not eligible for a federal student loan, a Pell Grant or an Oklahoma Tuition Aid Grant until the default is satisfactorily resolved.

  • Addition of attorney fees and collection costs to your loan balance. These fees can add up to 25 percent to what you already owe. Collection costs are added when no payment, or repayment arrangement, is made within the first 60 days of default. If you've set up repayment arrangements within the first 60 days of default, collection costs will be added if you become two payments past due.

  • Damaged credit rating. After default, you have 60 days to establish satisfactory repayment arrangements. Failure to satisfy the balance within 60 days results in a negative report to national consumer reporting agencies, thereby seriously damaging your credit.

  • Collection agency referral. Accounts are referred to external collection agencies for further collection efforts after approximately six months of non-payment.

  • Transcript hold. Your school can hold your academic transcript if your student loan is in default. The academic transcript is the property of the school and it's the school's responsibility to decide whether to release the transcript to you. Our role is only to inform schools of the account status.

  • Potential lawsuit. A civil claim may be filed against you for repayment of your loan.

  • Lingering debt. The debt you owe will remain due until you pay it in full. If it's not paid, various agencies and the federal government will continue to seek full payment.


:: Additional Resources ::

  • Consequences of Delinquency and Default (PDF)



OCAP Oklahoma College Assistance Program

Ready Set Repay is an initiative of the Oklahoma College Assistance Program, an operating division of the Oklahoma State Regents for Higher Education

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