Which of the following is not true if you default on a student loan?

Which of the following is not true if you default on a student loan?

A. You will not be allowed to request a deferment for the loan.

B. You will not be allowed to open any bank accounts or make investments.

C. You may have money taken directly out of your paycheck to cover your debt.

D. You may not be eligible for additional financial aid for future studies.

Answer: B. You will not be allowed to open any bank accounts or make investments.

It is unlawful to default on a student loan and the following are the repercussions; indeed, one will not be eligible for bank accounts or make an investment, although not entirely true. Even though defaulting on a student loan can harm one’s financial life, one cannot be barred from basic financial activities such as banking or investing. The other options stated are actual ramifications of defaulting on a student loan. For example, option A – the ability to request a deferment is indeed missed as defaulted loans are no longer qualified for most types of relief. To be paid less because lenders take part of one’s wages (option C) to recover defaulted student loans is rife in our society. The government is allowed to take up to 15% of your disposable income to repay the loan. Also true was option D, being that defaulting on federal student loans will disqualify you for further federal student aid unless you make suitable repayments. Other legal incidences that are likely to occur as a result of failure to pay for student loans are that your credit score is pulled down, hence you cannot be approved to rent an apartment or any credit cards and loans. You could also be sued and depending on the gravity of the offence, there are cases where licenses to practice certain professions could be revoked. Although these are the repercussions, they do not go to the extent of denying you privileges in activities such as opening bank accounts and investments.