Terms, conditions and steps for default:

• A loan is considered in default when a borrower's delinquency has persisted for 270 days for a loan repayable in monthly installments and 360 days for a loan repayable in less frequent installments.
• The lender files a claim after all attempts at collection have failed and the loan has entered default. If the lender's request for claim reimbursement is approved, the guarantor purchases the defaulted loan(s) from the lender.
• Once the loan(s) have been purchased, the defaulted loan(s) become the property of the guarantor, which continues to pursue collection.

• High-default colleges and universities may lose their eligibility to participate in the federal student-loan program.
• Defaulted borrowers suffer a blot on their records that will prevent them from receiving additional federal financial aid for college and may deny them consumer credit for years to come.

• The entire unpaid amount of the loan(s), as well as accrued interest, is immediately due and payable.
• Holds may be placed on college records.
• The borrower is ineligible to receive any additional federal student financial aid.
• State income tax refunds may be seized.
• Federal income tax refunds may be seized.
• The guarantor may notify the borrower's employer to garnish the borrower's wages.
• The borrower may be charged reasonable attorney's fees and other collection costs.
• The federal government is authorized to garnish federal salary checks for defaulters in public service.
• The borrower may lose repayment options.
• The borrower loses deferment options.