If your student loan becomes delinquent and you fail to make the necessary arrangements with your lender or servicer, your account could be paid in default. When a loan is paid in default, LOSFA pays the lender for your loan, and the balance is then owed to our office. At that point the following penalties may be applied to your account.

• The entire balance on your loan will become immediately due and payable.
• Your default will be reported to all major credit bureaus.
• The State of Louisiana may take legal action against you.
• Any deferments you may have qualified for are lost.
• Your state and federal income tax refund may be seized.
• You will no longer qualify for any federally funded loans, grants or scholarships.
• You may be denied copies of your school transcript.
• Licenses or certificates required to practice a profession may be denied.
• Collection cost, up to 25% will be added to the amount of your loan.
• Up to 15% of your disposable pay may be garnished from your wages.

To avoid the many penalties of default, it is important that you stay in touch with your lender. If contacted when a situation first occurs, you may be able to keep your loan from ever becoming delinquent. If for any reason you can’t make a payment on your account, contact your lender, then follow through on the decided plan.