If you fail to pay your student loans for a total of 270 days, you will descend into default and things could get very stressful for you. Your wages could be garnished. Wage garnishment is a legal procedure in which a person's earnings are required by court order to be withheld by an employer for the payment of debt such as your government student loan or your private student loan.

Your federal and state tax refunds could be seized as well; this will not bode well for your credit rating either. You will not be able to obtain any further credit with a default on your credit history record. The federal government will not let up... as they can collect on a student loan for at least 25 years. At this point you may feel that you will not see the light of day again; however it is possible to recover your bad debt.

You will need to be responsible about paying back the loan by paying twelve consecutive payments to the loan; these payments need to be made by the due date every month. Do not skip a month as you will be back to square one again. Once you have paid twelve consecutive payments the student loan then gets sold to a new lender and your default gets taken off your credit history. How this works is that when a new lender buys your defaulted loan, you start off on a fresh footing as if the old loan never existed in the first place.

However, not all records are removed from your credit history, missed payments before your default will remain for seven years. Once you have recovered from the default you once again have the same rights as other borrowers on your student loans, in other words you have the right to defer or apply for forbearance if you become unemployed.

You will also be given the option of other plans with your new loan, for example you could choose an extended, graduated or income-sensitive repayment plan program. With the extended payment plan, you can make the minimum payments of about $50.00; however this can take a very long time to pay the student loan off, at least 30 years. With the graduated repayment plan every two years your payments increases. With an income-contingent repayment plan, your monthly payments are calculated and adjusted each year based on your earnings and loan amount debt.