No, You can not go to jail for not paying student loans. Because student loans are considered as civil debts. However, if your student loan borrower sues you in court and you disobey court order or don’t appear in court then you might end up in jail. But it’s rare.
Did you miss your student loan payment? Thinking about whether you can be sent to jail for not paying your student loan?
Well, normally you can not be sent to jail for not paying student loan debts. However, it’s not as easy as that.
That’s why in this post I am going to briefly explain Can You Go To Jail For Not Paying Student Loans. Moreover, I’ll also discuss the consequences of not paying student loans, Student loan forgiveness, and many more related topics. So, stick here.
Can You Go To Jail For Not Paying Student Loans?
No, you can not be sent to jail for not paying student loans in the case of both federal and private student loans. However, not paying student loans can bring other consequences.
Student loans appear in the civil debt category like credit card debt. In case someone refuses or is unable to pay student loans then the person can not be sent to jail. Because in 1833 debtors’ prisons were banned under federal law in Congress. Moreover in 1983, the Supreme Court affirmed that
“Incarcerating indigent debtors was unconstitutional under the Fourteenth Amendment”
So, it’s illegal in the US to send someone to jail for not paying civil debts. These debts include student loans, and credit card loans.
However, in case you default on a student loan then the lender can sue you. Now if you don’t appear in court or disobey court orders then you can be sent to jail for contempt of court.
But what about other consequences of not paying student loans
Consequences Of Not Paying Student Loans
The consequences of not paying student debts vary depending on whether you have taken a federal student loan or a private one. However, in both cases, your credit score will be substantially down.
Though jail is rare in case of student loan defaults. However, the consequences are not light. Here are the consequences of not paying student loans
For Not paying Federal Student Loans
- The default loan will be sent to the collection agency as a result your credit score will be hurt negatively.
- The collection agency might request garnishment of your salary or bank account to the court.
- Garnishment of your tax refunds and social security benefits is also a possibility.
For Not Paying Private Student debt
- Might sue you in court.
- Report your student loan default to the credit bureaus.
- Your wages might be garnished or you might end up with a hefty fine depending on the court’s verdict.
As you can see, defaulting on a student loan is not a wise thing to do as the consequences are pretty serious. So, if you are unable to pay your student loan then you should consider options like student loan forgiveness.
So what is the eligibility for Student loan forgiveness?
Am I Eligible For Student Loan Forgiveness?
Yes, you will be eligible for federal student loan forgiveness if you have taken the undergraduate, graduate, or parent plus loan before 30 June 2022. However, you have to fit under certain criteria and private student loans will not fall under the student loan forgiveness plan.
According to the White House Announcement, a person will be eligible for federal student loan forgiveness if
- The loan was taken before 30 June 2022
- If the borrower is single and earning less than $125,000 per year, or
- In case a household earning less than $250,000,
If you meet the above 3 criteria then you are eligible for $10,000 in student loan forgiveness. Moreover, if you fall under the income caps and received Pell Grants in college then you will receive an additional $10,000 – totaling $20,000 in student loan forgiveness.
However, if you are not eligible for loan forgiveness then you can apply for settlement of a federal student loan. In the case of private loans, you have to bring in your loan current.
Now that we have found out you can not go to jail and the consequences, how you can avoid defaulting on student loans. So let’s have a look at some frequently asked questions.
Do Student Loans Ever Go Away?
No student loans do not go away. However, Student loans can be forgiven, canceled, or discharged in certain circumstances depending on the type of loan and the situation.
The most common type of student loan is a federal student loan. These loans are offered by the Department of Education and come with a variety of repayment options, including income-based repayment plans and loan forgiveness programs.
Federal student loans can be forgiven in case
- The borrower dies,
- The borrower becomes permanently disabled
- If the school closes while the student is enrolled. The loans can also be forgiven
- In case the borrower participates in a qualifying public service job for 10 years.
Private student loans are a little different. These loans are offered by banks and other private lenders, and they typically come with higher interest rates and fewer repayment options.
Private student loans can be forgiven in case the borrower dies or becomes permanently disabled. But there is no loan forgiveness program for public service.
What happens if you don’t pay off student loans in 25 years?
After 20-25 years any remaining loan balance will be forgiven for some federal student loan plans. However, you have to survive the consequences of not paying student loans first.
In some federal student loan plans, any remaining balance will be forgiven after 20-25 years. However, If you don’t pay off your student loans within 25 years, the government can garnish your wages, tax your Social Security benefits, and take other legal actions to get the money they’re owed.
Though you can not be sent to jail for not paying student loans, the consequences of not paying can be as bad as jail. So, it’s better to pay off your student debt. In case it’s not possible for you then consult with a student loan attorney and find out your options.
I hope this post on Can you go to jail for not paying student loans was helpful. Let me know your opinion in the comments.