A loan is in default if the borrower (1) fails to make a payment when due, (2) fails to submit on or before the due date of a scheduled payment, proper documentation requesting forbearance, deferment, or cancellation; or (3) fails to comply with the terms of the promissory note (i.e. not providing the school with name or address changes).
Consequences of default
- Past due information reported to national credit bureaus.
- Late charges
- Official academic transcripts withheld and restriction on further registration from University of Nebraska at Kearney
- Ineligible to receive additional federal or state financial aid
- The entire principal balance of the loan may become immediately due
- Placement of the loan with a collection agency where the additional costs will be added on to the loan balance
- Litigation
If your loan is already in default, contact the school to see if you are eligible for deferment, forbearance or to make payment arrangements. Also see loan rehabilitation.