What will happen if I default on a parent PLUS loan?

If you default on a parent PLUS loan, you may still be on the hook to repay the debt. The debt you owe is to the federal government, and debts to the federal government are the most senior debts on the list. The Department of Education may sue you to recover the funds. Even in bankruptcy, you will be ordered to repay through a payment plan. If a judge determines that there is absolutely no way for you to repay the debt without incurring undue hardship, there is a possibility your loan will be discharged. However, this is very rare, and your credit will still suffer as a result. 


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