What happens if I don't make my loan payments?
You may go into default. Defaulting on your Perkins Loan can have very unpleasant financial consequences:
- You can be required to repay the entire loan immediately and can be sued by either the school or the Federal Government to collect it.
- You can be charged all interest plus late payment fees, court fees and collection costs.
- You can be reported to credit bureaus and have your credit rating affected.
- The IRS may withhold your income tax refund and apply it to your loan balance.
- Up to 15% of your wages can be garnisheed to collect the debt
- If you receive Social Security payments, a portion of these may be claimed to pay off your loan debt.
- Your school records will be impounded, you will be prohibited from registering at any CUNY college and will not receive any additional federal aid until the default status is rescinded.
What are my rights as a borrower?