By the time a person's student loans fall into default, they will see their credit score tank around 60 points, to an average of around 550, which is considered "very poor," by rating company Experian. Borrowers who stay current, on the other hand, have scores on average in the high 600s.
A low credit score can force people to pay higher interest rates, delay buying a house and even have to worry about being disqualified from certain jobs.
The government also has extraordinary collection powers with federal loans, since they're one of the only debts unable to be discharged in bankruptcy.
"Negative effects of student loan default can be wage garnishments, tax offsets, and other methods of loan collections," said Elaine Griffin Rubin, senior contributor and communications specialist at Edvisors. "In addition, some states suspend or revoke state-issued professional licenses, and some states suspend a driver's license because of a defaulted loan."
To make matters worse, defaulting on your education debt also increases the balance, likely due to collection fees and the accumulation of interest. After default, the Urban Institute found, a student loan borrower will see their balance balloon by around 10 percent.
These myriad consequences that come with a default can be hard to recover from, Kantrowitz said.
"At best, it delays participation in the American Dream," he said. "At worst, they are shut out permanently."