Financial Literacy and Default Management

Don’t let student loans go into default. Remember to completed your Exit Counseling prior to withdrawing, graduating, or dropping below half-time attendance at HCC. The Exit Counseling will help you understand your rights and responsibilities as a loan borrower. The Exit Counseling also provides tips to help you manage your student loans.

The Department of Education offers Loan Repayment Plans and Calculators. When the loan comes due, the federal loan servicer will mail a payment schedule with monthly payment of principal and interest, and the unpaid balance for each month it takes to repay the total debt.

If you are not contacted by the loan servicer, YOU are responsible for contacting them at:

U.S. Department of Education
Direct Loan Servicing Center
PO Box 4609
Utica, NY 13504-4609
800-730-8913 (TYY) NSLDS - National Student Loan Data System
Use NSLDS (National Student Loan Data System) to keep track of how much federal funds you borrow

Loan Default

Default is a serious consequence for not repaying your loans. It will occur if you fail to make a payment for 270 days. The school, lender, or agency that holds your loan may take action to recover the money.

Not paying back your student loans can have serious consequences including:

  • The lender can require that you repay the entire amount immediately, including all interest, collections, and late payment charges.
  • The lender can sue you and can ask the federal government for help in collecting from you.
  • The lender can garnish your wages.
  • The Internal Revenue Service may withhold your income tax refund and apply it toward your loan repayment.
  • You cannot get any additional federal student aid until you make satisfactory arrangements to repay your loan.
  • The lender may notify credit bureaus of your default. This may affect your credit rating, which will make it difficult to obtain credit cards, car and/or home loans in the future.

In many cases, default can be avoided by submitting a request for a deferment, forbearance, discharge, or cancellation and by providing the required documentation.

There are several options for repaying your loans if you suffer a financial hardship or other circumstances. Defaulted Student Loan information line: 1-800-621-3115