What happens if you default on your student loans?

The video discusses the implications of not paying student loans, including default consequences and credit score impacts. It highlights President Biden's plans to assist borrowers, such as the On Ramp and Fresh Start programs, which offer temporary relief and options to return to repayment. The video also covers various repayment plans to avoid default, emphasizing the importance of communication with loan servicers.

What is the immediate consequence of defaulting on a private student loan?

• The loan balance is forgiven.

• The loan is reported to credit agencies.

• The interest rate is reduced.

• The loan term is extended.

What is the purpose of the 'on ramp' plan introduced by President Biden?

• To protect borrowers from severe consequences for a year.

• To extend the repayment period indefinitely.

• To reduce interest rates on student loans.

• To permanently cancel student loans.

What happens to interest on loans during the 'on ramp' period?

• Interest is compounded daily.

• Interest is reduced by half.

• Interest continues to accrue.

• Interest is waived.

What is the Fresh Start program designed to do?

• Forgive all outstanding loan balances.

• Extend the loan repayment period.

• Remove default records from credit reports.

• Increase loan interest rates.

How can borrowers avoid going into default with low income?

• By applying for Income Based Repayment Plans.

• By ignoring loan statements.

• By taking out more loans.

• By paying the full amount immediately.