There are many variables that can contribute to not being able to pay back a student loan, such as the inability to find a job and sickness.
PRIVATE STUDENT LOANS – If you have a private student loan, most are subject to variable interest rates. This can throw a wrench into a carefully planned budget if your rates go up. It’s important to establish a relationship with your loan servicer, so that if payment issues arise, you can call them and try to work out a plan. However, if you simply cannot pay your private student loans back, then you will go into “default”. You are considered in default on a private student loan when you miss your first payment. And then after 180 days, your account is considered “charged off”. This means the lender does not believe they can collect the loan from you anymore. This doesn’t mean you don’t still have to pay back the loan. You are still legally responsible for paying back the loan. At this point, your lender will most likely start sending debt collectors after you to recover your student loan debt. If that fails, you will probably be sued in a debt collection lawsuit.
FEDERAL STUDENT LOANS – If you have a federal student loan, your best bet is to see if you can get into a student loan repayment plan, such as “Pay As You Earn”, “Income-Contingent” and “Income-Based Repayment” plans. You can go to the Federal Student Aid website to get started on applying on your own. Or you can have a student loan lawyer help you navigate through the system. Be aware of student loan debt relief companies who promise to get you a great deal with the federal government (see section below about student loan scams). If you have a federal loan, you also might qualify for forbearance or a deferment if you can explain a valid reason why you can’t pay the formerly agreed upon loan payment amount. Federal student loans are considered in default when a payment has not been made in 270 days. Much like private student loans, if you default on your loan, the federal government will come after you most likely with debt collectors and potentially seek to garnish your wages or intercept your federal tax refund.