IUPUI

Consumer Information

Loan Default Consequences and Default Rates

Loan Default Consequences

For a Federal Perkins Loan, default occurs if the student borrower does not make an installment payment when due or does not comply with other promissory note terms. For a Direct or FFEL (Federal Family Educational) Stafford Loan, default occurs if the student borrower becomes 270 days delinquent (monthly payment) or 330 day delinquent (other than monthly payment).

The consequences of default are severe and include:

• The entire loan balance can be immediately due and payable
• Loss of deferment options
• Loss of eligibility for federal student aid
• Loan account submission to a collection agency with additional interest charges, late fees, collection costs, and possibly court costs and attorney fees
• Reporting to national credit bureaus and damage to the student borrower’s credit rating
• Federal income tax refund may be withheld and applied to loan repayment
• An employer, at request of loan holder, may withhold part of you wages to apply to loan repayment
• Potential loss of eligibility for professional licensure in some state

If you are having trouble making payments, contact your lender as soon as possible.

For additional FFEL student loan default information for the U.S. Department of Education, visit Federal Student Aid on the web.

FFEL Default Rates

Source: U.S. Dept of Education National Student Loan Data System

Campus	FY Being Reported	# Entering Repayment	# In Default	Default Rate
Indianapolis	2005	9143	148	1.6%
	2004	5562	128	2.3%
	2003	5042	110	2.1%
	2002	5127	130	2.5%
	2001	5001	151	3%
	2000	5397	295	5.4%
	1999	5090	224	4.04%
	1998	5210	202	3.8%
	1997	4918	266	5.4%
	1996	4483	271	6%
	1995	4222	214	5%
	1994	3832	201	5.2%
	1993	3343	136	4%

2005FY Default Rate Average: National 4.6% and Indiana 3.7%