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from registering at any CUNY college and will not receive any additional federal aid until the default status is rescinded.
