I heard that student loans, that if unpaid, the company can deduct the money.?

Is it true that the place where your student loan is from can take money directly from you and your cosigners paychecks if the loan is unpaid?? And is this true for only stafford/government loans, or for private loans as well??

I heard that student loans, that if unpaid, the company can deduct the money.?

Student loans are no joke. Federal loans (Stafford, PLUS, Perkins) will result in many unfortunate events if left to go into default. 1) If you received these loans through the FFELP system, then the lender turns your loan over to the feds as a defaulted loan. 2) The feds then try to get their money back. They can/will garnish wages, keep any federal tax refunds, block you from getting any professional licensures, tack a 25% service fee on your original loan and collect until you die. You can't even file for bankruptcy to get away from them. They still apply after the bankruptcy. Also, no more federal aid until you get things paid, so no grad school or the such.

If they were Direct Loans, same thing happens, just go directly to step 2.

Alternative loans have concequences too. Just more like debt collection and bad credit on your credit history that will keep you from buying a house or car or anything else that requires a credit check. (This is true for a fed loan, too.)

All in all, bad idea to default on loans. You are better off to plan ahead and if it looks like you're in trouble, call the lender and ask for a deferment until you can get things together.