Boland says in order to pay off her debts in a relatively short time period, she'll need to earn a much higher salary. Most students with lower incomes are embarrassed by the fact that they can't repay their loans. Feelings of inadequacy and guilt often prevent students from contacting their lender, which is another reason that so many are prone to default. They try to walk away from repaying and don't talk to their lender about it. Once a student defaults on a college loan, the chances are the student's credit report will be negatively effected, Ziehmer says.
Students are subject to having their wages garnished and their tax refunds withheld.
A 25 percent collection cost may be assigned, and the student will be reported to at least three national credit bureaus. In 1998, a Default Prevention Task Force, made up of financial aid directors and other education officials from across the state, was formed. Its purpose, Ziehmer says, was to teach students about managing credit card debt, and introduce them to the complexities of paying for college. For students like Boland, the reality of paying back the loans is setting in. She realizes she will be paying for her college education for many years to come.