If you default on a student loan, what happens? Unfortunately, more Americans are finding out the answer first-hand.
Student loans now have the highest delinquency rate of any consumer loan, higher even than car loans or credit cards, according to Bloomberg Businessweek. Many of those student loan delinquencies -- i.e., missed payments -- will lead to student loan defaults.
Default occurs when a borrower continues to miss payments on a loan. For federal student loans, for example, default is when no payment has been received for 270 days. At that point, a lender like the Department of Education may take steps to collect payment.
There are several ways this can happen. For example: