Consumer Law, Warranties Katrina SBA loan default

[jps2]

We first tried applying for federal emergency grants after Katrina like everyone else was doing but were turned down for having good credit. This good credit was established by our parents for the most part, the two of us were unemployed and full time students in college. After losing everything we really had no choice but to take the loan. The loan was for $39,500 with a 2%interest rate and a duration of 30 years. We have been paying on the loan now for two years. On one instance when we fell short of payment for two months they threatened to hand the policy over to the U.S treasury. There was no collateral agreement in the loan, infact I was told if we did not repay the loan we could go to jail. My question is what would be the most likely outcome if we defaulted on the loan? The way I see it is, it was clearly our responsibility for taking the loan money but a irresponsible decision on the SBA to loan money to two full time students who were unemployed at the time and just happened to have good credit scores. Most hurricane victims got grants, I don't understand.

 

[alex45]

Thanks for info..