Student loans are designed to help students pay for college tuition, books, and living expenses. It differs from other types of loans in that the interest rate is substantially lower and the repayment schedule is deferred while the student is still in school.
A borrower is responsible for repaying their student loan even if the borrower does not graduate, has trouble finding a job after graduation, or just does not like the school.
The US Department of Education Debt Collection Service publishes a guide called “Guide to Defaulted Student Loans”, to help students repay their defaulted student loans. It includes information about repaying a defaulted student loan, loan consolidation, the consequences of default, collection costs, resolving disputes, ineligibility for further Federal Student Aid, and related topics.
For more information on repaying a defaulted loan, call 1-800-4-FED-AID (1-800-433-3243 OR 1-800-621-3115.)
Please keep in mind that student loans are now generally not dischargeable through bankruptcy. Student loans must be paid at some point. You are required to set up some type of repayment plan, having a 6-month history of good payments in order to qualify for a mortgage loan.