There are currently 44.2 million Americans with student loan debt, and of that 44.2 million, 11.2 percent are in 90+ days of delinquency or default. That shakes out to nearly 5 million people. But what exactly happens when you do not pay your student loans off? In general, it is a financial move that can have severe repercussions.

The First Thing That Happens When You Stop Paying

You probably already know that you have a billing date, and then typically get a grace period of 28 days to pay the monthly payment in full. If you fail to make that monthly payment by the end of that grace period, your loan will then go into delinquency.

According to the U.S. Department of Education, a loan becomes delinquent “the first day after you miss a payment. Even if you miss just one monthly payment and then start making payments again, your loan account will remain delinquent until you repay the past due amount or make other arrangements, such as deferment or forbearance, or changing repayment plans.”

In the event of this happening, you will usually have your lender calling you. What follows are three reminders: 30, 60, and 90 days delinquent past due notices. The lender will continue to call to see if and when you plan on making a payment. After 90 days have gone by, the lender will typically notify the credit bureaus and then send you a final reminder. After being 270 days delinquent, your loan is officially in default. It is then transferred to one of the student loan collecting agencies. You can bet that no matter who your lender is, they will get their money.

Repercussions for Defaulting

First and foremost is that you will destroy your credit score. This can have wider financial implications, such as if you want to buy a home or a new car at some point. And once you damage your credit score, you are going to have to work to improve it. Once your loan goes into default, the entire amount that you owe plus interest becomes due. Your options become extremely limited at this point for you lose the ability to go into forbearance, deferment, repayment plan, or seek additional financial aid.

One of the ways that they can come after you for the money is wage garnishment, which means that they will take money from your paychecks until the debt is paid off. They can also garnish your tax return, social security, come after you by taking legal action, and place liens on properties you own.

What You Can Do If You Can’t Afford to Pay Your Loans

If you find yourself in dire straits financially, and you are unable to make payments on your loans, then you should contact your lender before this whole quagmire begins. You can try getting on a different repayment plan, such as an income-based repayment plan, which depending on if you qualify, would mean your payment would only be $0 a month. You can also look into forbearance, or deferment, or forgiveness programs. Keep in mind though that your interest will still accrue with forbearance or deferment, so this option should be used only temporarily until you can start making payments again.