Can Student Loans Take your House?

October 6, 20220


If you’re the parent of a college-aged student, you know how expensive it can be to send them to school. Tuition plus books and supplies can easily run over $50,000 per year, and that’s not even including the cost of housing or food. So it’s no wonder that many students borrow money from a lender like Sallie Mae or another company offering student loans in order to cover those expenses. But what happens if you can’t pay back your student loan debt? Or what if you’re already facing foreclosure on your home? Can these things happen? What are the chances? Let’s take a look at some common questions surrounding student loans and home ownership:

What happens if you default on your student loans?

If you’re having trouble paying back your student loans, it’s important to know what can happen if you default. It’s also crucial that you act quickly if you feel like your situation could become dire. Here are some of the things that might happen:

  • You may not be able to get a job. If the lender realizes that you’ve defaulted on your debt, they could decide not to hire or promote you because they think it would be too risky. You’ll still have to pay them back somehow!
  • They can come after your wages. The lender could sue and win a judgment against you for debt collection purposes (which means they’ll probably garnish your wages). This means that every month until they get their money from somewhere—likely by taking it out of every paycheck—they’ll take whatever percentage applies in accordance with state law until they’re paid in full (and then there are additional fees). They can do this even if living paycheck-to-paycheck becomes impossible!
  • Your tax refund is at risk too! If there isn’t enough money in government coffers due to unpaid taxes, those funds will pay off these debts instead.”

Does the federal government have the power to take your home if you default on student loans?

The answer is no.

As a borrower, you have certain rights in the event of default. The federal government cannot take your home if you default on student loans. However, they can garnish your wages or other assets such as bank accounts (in excess of $1,000).

The federal government does not have the power to take your house just because you are behind on repaying student loans; however, if they were able to do so it would likely be due to some other legal action brought against them by an entity such as a collection agency or a creditor seeking payment for goods or services rendered (such as medical care).

Can federal student loan debt cause you to lose your home?

Yes, it’s true. The government can come after your home if you don’t pay back your student loans or default on them.

However, there are some things that you need to keep in mind when thinking about whether this will happen to you or not. First off is the fact that while federal student loans do have provisions that allow the lender (the Department of Education) to take assets like your house if they feel like they’re entitled, it doesn’t happen all the time and usually only happens after a long period of financial hardship caused by not being able to make payments on a loan.

Next up is the fact that there is no one-size fits all answer for what can happen if someone fails financially because everyone’s situation is different—some people borrow more than others do at different times in their lives; some people have more assets than others do at different points as well; some people live within their means while others spend more than they earn so it’s difficult for anyone else outside those relationships with those individuals know what might be possible when push comes to shove during tough times such as these.”

Will you lose even more money if the government takes your house to pay off those debts?

If the government takes your house to pay off student loans, you could lose more money.

No, but you could lose the income that pays your mortgage and the interest on your debts can be accrued while you are fighting a legal battle in an effort to prevent them from being discharged through bankruptcy.

No, student loans cannot take your house.

But you could lose the income that pays your mortgage and the interest on your debts can be accrued while you are fighting a legal battle in an effort to prevent them from being discharged through bankruptcy.


One thing to keep in mind is that while your student loans can be discharged through bankruptcy, you might not want them to be. For example, if you have other debts in addition to student loans and the government takes your house as payment for those debts, then those other debts won’t be discharged through bankruptcy anymore. And since interest accrues on both types of debt while they’re being fought over in court (or before if both parties agree), it could cost you more money than ever imagined!