Can You Go To Jail For Not Paying Student Loans?

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Can You Go To Jail For Not Paying Student Loans? Many students will like to know if they will go to jail for not paying student loan. Well, we shall provide answer to this question in this comprehensive guide. We shall also show you the penalties associated with not paying student loans. Before we start let’s briefly consider what a student loans entail and how you can get it.


What Is Student Loan?

A student loan is a sort of loan that is used to assist students in paying for post-secondary education and associated fees, such as tuition, books and supplies, and living expenses. The interest rate may be significantly cheaper than other types of loans, and the repayment schedule may be deferred while the student is still in school. In many nations, the rigorous laws governing renegotiating and bankruptcy are also different.

What Happens When You Cannot Pay Student Loans?

If you fail to pay off your student loan, these are likely what will happen to you:

You Will Be Reported To Credit Bureaus

It is technically “delinquent” when your loan payment is 90 days late. All three main credit bureaus are notified of this fact. You’ll see a drop in your credit score.

As a result, any new loan applications may be refused or granted only at the riskier borrowers’ higher interest rates. You can be followed by a negative credit rating in a variety of ways. Applicants’ credit ratings are frequently checked by potential employers, who can use them as a gauge of their character. Cell phone service companies may also refuse to give you the contract you want. Customers who are not creditworthy may be required to pay a security deposit by utility companies. Your application may be denied by a prospective landlord.

Your Account Is Default

When a payment is overdue for 270 days, it is considered “in default.” Your account is referred to a collection agency by the financial institution to which you owe money. The agency will do everything possible to get you to pay, with the exception of acts forbidden by the Fair Debt Collection Practices Act (FDCPA). Fees may be added by debt collectors to cover the cost of collecting the money.

It could be years before the federal government gets involved, but when it does, the powers it has are vast. It has the power to confiscate your tax refund and apply it to your debt. It has the ability to garnish your paycheck, which means it will contact your employer and request that a portion of your money be remitted straight to the government.

Read also: Top 3 Best Loans For The Unemployed

What You Should Do?

These catastrophic effects are avoidable, but you must act quickly before your loan defaults. Several federal programs are available to those who have federal student loans, such as Stafford or Grad Plus loans, but not to parents who borrowed for their children.

Income-Based Repayment (IBR), Pay As You Earn (PAYE), and Revised Pay As You Earn (REPAYE) are three comparable schemes that reduce loan payments to a manageable level based on the applicant’s income and family size. After you make your payments over a number of years, the government may even contribute a portion of the interest on the loan and forgive any outstanding debt.

The debt is canceled, but only after 20 to 25 years of payments have been made. Payments may be cut to $0, but only while the debtor’s income is extremely low. The Public Service Loan Forgiveness Program is for persons who work in public service, whether for the government or for a nonprofit organization. After 10 years on the job and 10 years of payments, participants may be eligible for federal debt forgiveness.

Details about these federal programs, as well as information about eligibility, are available online. It’s crucial to note that none of these options are available to persons who have defaulted on their student loans.

Contacting your lender as soon as you find you’re having problems making payments is an excellent starting step. The lender may be able to work out a more manageable repayment plan with you or direct you to one of the federal programs.

Can You Go To Jail For Not Paying Student Loans?

Although there were laws in place in the early days of America that permitted anyone who couldn’t — or wouldn’t — pay their debts to be imprisoned, the practice was prohibited in 1833. This country no longer has debtor’s prisons. Failure to pay your student loans does not result in “going to jail,” according to the United States Department of Education’s website.

In the United States, failure to repay a debt is not a criminal offense. It’s a civil dispute. What’s the difference between the two? To be charged with a crime against the state, you must have committed a crime against the government. A civil charge is a legal dispute between two people or entities, such as a borrower and a lender. It will be in civil court if a lender sues you for your student loan debt. A civil matter will not land you in jail.

The lack of clarity about the reason for the arrest contributes to the confusion connected with getting arrested for defaulting on student loans. Borrowers can still go to jail if they default on a loan, even if they do not go to jail for defaulting on a loan. An arrest warrant will be issued if a judge issues a judgement requiring you to conduct specified measures and you fail to do so — or if you persistently ignore a court summons. Do not disregard a summons to appear in court if you receive one.

What To Do If You Can’s Repay Your Student Loan

If you found yourself in a situation where you can’t make your student loan repayment, we advise that you do the following:

Reach Out To The Lender

Begin by calling your lender to see if you can come to an agreement on a reduced monthly payment that is more in line with your budget. Many lenders are eager to deal with borrowers, which may surprise you. They’d rather get a little cash than none at all.

Go For Income-Driven Repayment Plan

If you have a federal student loan, you can ask to be placed on an income-driven repayment plan by contacting the lender. You’ll have to show that you have a financial need, but those who qualify will have their monthly loan payments reduced based on their income. Not only will your monthly payment be cheaper, but any outstanding debt on your loan may be canceled after 20 to 25 years.


For a variety of persons, deferments are a possibility. Individuals in the military, students still in school, employees of a public service organization, students in a medical residency, and anyone experiencing financial difficulty are all eligible for a student loan deferment. You can defer your student loan payments for up to three years when you apply for a deferral. Unsubsidized loans, on the other hand, do pay interest throughout this time.


In the same way as a deferral pauses your payments, a forbearance does the same. With a forbearance, the loan will continue to accrue interest, meaning you’ll have a higher burden to deal with when you resume payments. Because most forbearance programs are only accessible for a year at a time, you’ll have to reapply each year you qualify.

Loan Consolidation

You may be eligible to consolidate your debts if you have more than one. Multiple payments are far more difficult to manage than a single monthly payment. You should also browse about since you might be able to consolidate your debts with a business that can offer you a reduced interest rate. SoFi, Discover Student Loans, Splash Financial, and CommonBond are just a few of the top financial companies that offer consolidation loans.


Hope you enjoyed reading this article on: Can You Go To Jail For Not Paying Student Loans? As you can see there’s no law that states that students should be jailed for not being able to pay student loan. If you’re unable to repay your student loan, you can follow the tips we have provided in this article. It will help you greatly!

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