This Loan Default Calculator illustrates the extra costs associated with defaulting on a student loan.

Under current law, the following charges may be assessed against a defaulted borrower:

• Late Fees. Up to 6% of each late installment, where late is defined as more than 15 days after the due date (FFEL) or 30 days after the due date (DL).
• Collection Charges. Collection charges of up to 25% of the amount applied to principal and interest (20% of each payment on a defaulted loan) may be deducted before applying the remainder to late fees, then accrued interest and finally to principal.
• Garnishment. The government may obtain garnishment of up to 15% of disposable pay. Disposable pay is defined as income remaining after deduction of any amounts required by law to be withheld, such as income taxes.