<p>are your previous loans paid back or in process of being paid back?
If your previous loans are in default- you will not be eligible for addtional loans</p>
Consequences of Default on Student Loans
When you receive a student loan, you sign a Promissory Note that contains significant legal obligations. One of these obligations requires you to repay your loan according to the Payment Schedule and Disclosures Form given to you by your lender or their representative. If you become significantly delinquent in your monthly payments, your loan may be defaulted.</p>
<p>In the event of a default, the following may occur:</p>
<p>While in default, you will not be eligible for any federal or state financial aid.
Every loan entering default status is reported to a nation-wide credit bureau as an "Educational Claim". This negative entry will remain on your profile as long as there is an outstanding balance. Even after the amount is paid, the profile will reflect a "Paid Collection Amount" status for seven years after the paid date. This negative status may affect your ability to obtain credit for a mortgage, automobile or personal loan, or credit card.
If your loan(s) enters default status, you become subject to the IRS Offset Program. A claim will be filed against any Federal Income Tax refund. Any funds received under the IRS Offset will be credited directly toward your outstanding balance. This will be done every year as long as there is an outstanding balance.
Lenders have the ability to initiate legal action in every state and abroad, possibly resulting in wage garnishment and property liens. All collection costs, lawyers fees, etc. will be added to the principle of your loan.