Millions of people turn to student loans to finance their higher education. But once you’ve taken out these loans, paying them off can be a difficult and stressful process. If you have student loans, you might feel like the unpaid balance constantly looms in the back of your mind, simultaneously causing you stress and accumulating interest.

You may have even asked yourself, “What happens if I stop repaying my student loans?”

You’re not alone, and the prospect can certainly feel tempting. However, ignoring your student loans doesn’t make the problem go away. In fact, it can make your financial issues much worse. Read on to learn more about what happens when student loans aren’t paid and what you can do to help make repayment more manageable.

Student Loans are Persistent

According to 2024 research, the amount of total student loan debt currently owed between federal and private loans amounts to $1.814 trillion. The average individual borrower owes about $42,673.

For an individual trying to find a successful start in life after finishing school, carrying this extra financial burden can be a heavy weight. The situation can be even more problematic for those who chose not to finish their studies and thus have accrued tremendous debt without a job-securing degree to show for it.

When money problems become too overwhelming, some people may file for bankruptcy to experience relief from their debts and get a fresh slate. Unfortunately, the vast majority of student loans generally cannot be discharged during bankruptcy.

Even still, there are a couple of ‘outs’ that some people explore as potential solutions to their student debt problems:

• Student loan forgiveness programs – While there are student loan forgiveness programs available, these options are typically reserved for federal student loans only, and for certain professions such as public service workers and teachers. 
• Rare circumstances – In some very uncommon cases, loans can be canceled entirely or discharged. This can occur when a school closes its operations or when the borrower suffers a permanent disability. However, it’s best to take action instead of hoping for an unlikely outcome like this.

Exploring the Effects of Nonpayment

The truth is, ignoring your debt will only make matters worse. When you receive student loan funding, you agree to certain conditions for paying that money back. So, failing to meet those requirements will result in a variety of consequences.

Immediate repercussions can include:

• Increased interest rates on remaining balances
• Additional fees, including late fees

Long-term consequences of nonpayment may look like:

• Negative impacts on your credit score
• Loss of eligibility for federal programs

If you neglect your monetary responsibilities, you could even face legal action such as:

• Wage garnishment, meaning your lender can take the money they are owed directly from your paycheck
• Tax refund withholding
• Lawsuits

The Department of Education began notifying borrowers of the resumption of loan garnishments beginning the week of Jan. 7, 2026. This action was previously frozen after the Covid-19 pandemic.

Ultimately, when you avoid paying off your student loans, you create a snowball of a problem. The longer you let this snowball build up, the more destructive it will become later.

How to Avoid Student Loan Default

When you default on a student loan, you have failed to repay the money you owe in proper accordance with the terms of your lender. Private student loans often default after 90 days of missed payments. For the majority of federal student loans, failing to make a payment within a period of 270 days will result in your loan holder taking steps to place the loan in default and collect on it.

If you’re worried this outcome might be on your horizon, it’s wise to take the necessary precautions to prevent it. The good news is that there are strategies you can use to experience temporary relief.

Deferment or Forbearance

By requesting loan deferment or loan forbearance, you can pause your federal student loan payments for a certain amount of time, giving you more wiggle room to recover and get back on track. Deferment means you can temporarily stop making payments. Forbearance means you won’t have to make a payment, or you can temporarily make a smaller payment for up to 12 months. However, the loans will still be waiting for you when deferment or forbearance end, and interest may continue to accrue. You must contact your lender to request these benefits.

There are a variety of situations that can allow you to qualify for deferment or forbearance. These include, but are not limited to:

• Being enrolled in college or a vocational school
• Suffering economic hardship
• Medical expenses
• Experiencing a period of unemployment

Private Loan Relief Programs

The strategies mentioned above can be great for dealing with federal loans, but what about private student loans?

Private student loans can sometimes be dealt with through relief programs or policies offered by lenders. To determine if you’re eligible, you’ll need to communicate with your specific lender—they’ll be able to guide you toward the best course of action for your unique situation. A credit union lender may offer more flexibility than other traditional lenders.

Student Loan Repayment Alternatives and Solutions

Income-Driven Repayment (IDR) Plans

An income-driven repayment (IDR) plan bases your monthly student loan payment amount on your income and family size. IDR plans have existed for federal student loans for quite some time, but it is important to note they will undergo changes under the One Big Beautiful Bill (OBBB) Act starting in July 2026. You must apply and be approved for these plans; learn more about the qualifications.

Student Loan Refinance

Refinancing is a popular loan repayment solution to make paying your balance more manageable. With this strategy, you can:

• Potentially lower your interest rate or monthly payment
• Combine multiple loans into a single payment

However, it’s important to keep in mind that opting to refinance can pose a few drawbacks, such as the loss of current and future federal benefits for student loans.

Federal Student Loan Rehabilitation

If your loans are already in default, you may be able to participate in loan rehabilitation. According to The College Investor, borrowers must enter into a formal agreement to make a number of voluntary, on-time payments — typically nine on-time payments within ten consecutive months. The payments usually consist of 15% of the borrower’s discretionary income, divided by 12. Some adjustments or alternative payment amounts may be available.

Get Your Student Loan Debt Under Control

If you’ve ever considered just stopping your student loan payments, you’re not alone. However, this strategy can have costly consequences. By taking proactive steps to manage your student loan debt effectively, you can get out from under your loans and find financial freedom.

Credit unions can be a valuable partner to help you conquer student loan debt — chat with our experts to learn more about your student loan repayment or refinance options.

This article was updated January 12, 2026.