If you default on a student loan, you will not be eligible for federal aid if you decide to return to school until the loan is paid in full, says Lori Bloomberg, assistant vice president for the U.S. Bank Student Banking Division. Depending on your type of loan, the federal government may pay the interest on it during your deferment period. But if you can't make a monthly installment, you will need to contact your lender or servicer (the company that owns your loan) to discuss the problem. On a 30-year deal, you might pay 6.36 percent. As long as you keep your job, your credit is good and interest rates stay stable, you should be able to refinance to a loan with better terms. In that kind of dream, there's no such thing as a risky loan. Avoid.
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