Student loan borrowers make up over fifty percent of college students. Today's high cost of education makes it almost impossible for many to get through college without getting financial help. The thing is, about 20% of educational loan borrowers drop out before they receive their degree.
College dropouts will still be responsible in paying back what they owe even if they haven't completed their studies. There are a lot of reasons why an individual cannot complete his studies but the consequences are the same no matter what these reasons are.
If a borrower decides to drop out during a semester, his debts may be canceled. To prevent a borrower from withdrawing early and end up keeping the borrowed funds, instructors are to report a student's attendance for several weeks into the term or until the designated drop date. If the borrower quits attending his classes before the drop date, the college will have the student loan canceled to prevent the funds from being dispersed. The borrower will then be responsible in paying off the cost of tuition and in case he cannot pay this will reflect on his credit score.
If the borrower drops out prior to graduation, he will still be asked to repay his college debts after the allotted grace period. Sometimes, a graduating student ends up dropping out of college due to financial difficulty or the need to keep a job. However remember that without a degree, paying back college debts could get especially difficult.
If the borrower is unable to repay his debts after dropping out, his debts will go to default. If the borrower has a federal student loan, this could be gravely detrimental - he may not be able to secure federal jobs, his government benefits may be taken away as well as tax refunds and Social Security payments and his wages garnished. Private lenders can sue you for non repayment and even filing for bankruptcy may not always discharge college debts.
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Article Source: http://EzineArticles.com/?expert=Lorrie_Barstow
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