Legal Question in Criminal Law in California

It's fraud if your intent when you take out the loan is to not repay it. You could go to jail for that, but it's much more likely to be handled as a civil matter.

If it simply turns out that you aren't able to repay the loan even though you intended to do so, then it's a simple breach of contract. You can't go to jail for that, unless circumstances make it look like you committed a crime.

If you are being investigated for such a charge, you should not speak to law enforcement. Immediately contact an attorney in or near your area, and go over all the facts, and then the attorney will advise you as to the best course of action. I wish you well...............David Wallin