Your federal student loans are considered in default after 270 days (nine months) of non-payment. Consequences include:

• Immediate increase in the interest rate of your student loans to 18.5 percent in addition to any collection agency fees.
• Immediate loss of your Title IV financial aid benefits.
• Negative reporting to the three credit bureaus, which could result in difficulties obtaining credit cards or home and auto loans.
• Withholding of your federal income tax return by the IRS to repay the defaulted student loans.
• Administrative wage garnishment of up to 25 percent of your paycheck.