If you default on your student loan:

• Your loans may be turned over to a collection agency.
• You'll be liable for the costs associated with collecting your loan, including court costs and attorney fees.
• You can be sued for the entire amount of your loan.
• Your wages may be garnished. (Federal law limits the amount that may be garnished to 15% of the borrower's take-home pay.)
• Your federal and state income tax refunds may be intercepted.
• The federal government may withhold part of your Social Security benefit payments. (The US Supreme Court upheld the government's ability to collect defaulted student loans in this manner without a statute of limitations in Lockhart v US (04-881, December 2005).)

Read more about defaulted student loans here...