I have a major debt issue. I have private loans as well as federal loans which I consolidated with a different lender. So, basically I have my federal loans with one lender and all my private loans with another lender. I fully understand the seriousness of defaulting on federal loans, but do the same rules apply for private loans? I mean, if I default on private loans will they garnish my wages or my tax refunds, since my credit scoring was used to give my the loan so it was obviously not a federal program but a private one. So is defaulting on a private loan just a problem for 7 years or just as bad as federal loans. So are the consequences of federal default the same as private loan default?? I have trying to get the answers for months, please help.

Thank you,

I am actually in the same situation as you and have been trying to find out the same thing. I am trying to find out if private loans can simply be not paid and will go away. I have 1 federal student loan and a private student loan.

I know federal loans will not go away and you should not default on them as you have to pay them and its nearly impossible to get rid of them less of the death or being completely disabled.

However, private loans act upon a different set of rules and regulations as they are not funded by the federal government rather a group of private lenders.

However, I think when it comes to private loans the lender can go after you for the debt as you signed a promissory note/contract. I would love to find out what exactly are the penalties and what actions they could take and if the actions would be successful. If you find out anything let me know. I am researching on the internet and have found nothing specific to what we are asking.

I do plan on paying my federal loans but hell if I get out of paying my private loans without them being able to get money out of me in 7 years they can't go after it. Also, I wanted you to know if any debt collectors or lenders have garnished your tax refunds. I owe $1,500 to the university and every year they are garnishing my federal tax refund as they can't touch the state refund.

I think there is way to stop them from doing that if you show it would cause undue hardship.