What Happens When A Student Defaults On a Federal Student Loan?

Russell Meyers
Nov 1 · 4 min read

Right now we are seeing the highest rate of defaults on federal student loans in the history of this country. This situation is unsustainable on many levels.

What happens when a student defaults on a federal student loan?

First, take a look at what the term “federal student loan” means. The term refers to a student loan which is backed by a guarantee by the federal government. In other words, the US federal government promises the bank that they will be reimbursed for the loan, even if the student…

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