What are the consequences of defaulting on a Student loan? Can’t the IRS or other department of government go after these monies?
RE: What are the consequences of defaulting on a Student loan?
SEE HERE:
http://www.nolo.com/legal-encyclopedia/default-student-loan-29859.html
The IRS can intercept any income tax refund you may be entitled to until your student loans are paid in full. This is one of the most popular methods of collecting on defaulted loans, and the Department of Education annually collects hundreds of millions of dollars this way. In some cases, you can challenge a tax refund offset.
The government can take (”garnish”) a limited portion of the wages of a student loan debtor who is in default. It can take up to 15% of your disposable income. However, it cannot take more than the equivalent of 30 times the current federal minimum wage.
The government can take some federal benefit payments (including Social Security retirement benefits and Social Security disability benefits, but not Supplemental Security Income) as reimbursement for student loans.
The government cannot take any amount that would leave you with benefits less than $9,000 per year or $750 per month. And, it cannot take more than 15% of your total benefit.
For example, if Doug receives monthly federal benefits in the amount of $900, the government may take either $150 (the amount of Doug’s $900 benefit that is over $750) or $135 (15% of Doug’s total benefit of $900), whichever is less. So, in this case, the government can take only $135 each month.
The government and private lenders can sue you to collect defaulted student loans. Unlike other debts, there is no time limit on suing to collect student loans — you can be sued indefinitely.
CLICK ABOVE LINK FOR THE REST....
They can hound you to the ends of the earth, take it out of your tax refund, garnish your wages or even take it out of your SSI disability income if you can’t work. Don’t even go there.