What Should I Do If I Can’t Make My Student Loan Payments

You make your monthly student loan payments as required. You haven’t missed a payment yet. Now you find yourself unable to pay your loans as scheduled and are worried about the repercussions. The good news is that there is help out there to keep you in good standing and avoid the issues you could face if you don’t pay them.

Deferment and Forbearance are two plans that can help you stay in good standing with your student loan balance.

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What is Deferment?

Deferment is a way for qualified borrowers to postpone payment of their student aid loans for a set period.

Depending on the loans you have, this deferment may apply to the interest charged on your loans as well.

This deferment of payment will normally last between six to twelve months at a time and has the possibility of renewal depending on your circumstances and the reason for the deferment.

Deferments can be utilized for specific cases of inability to make payments.

If you are currently enrolled in school, your federal loans will be in deferment until approximately three to six months after graduation.

After this time, you can apply for a deferment if you meet the criteria.

You should note though that not all deferments stop the interest on your student loans.

How Do I Know if I Qualify for Deferment?

You may qualify for a student loan debt deferment if you meet any of the following criteria:

• Spent at least half-time in college and have Direct PLUS or FFEL PLUS loans
• Enrolled in an approved graduate fellowship or rehabilitation training program
• Unable to pay due to unemployment or are not able to find full-time employment

You may qualify for an economic hardship deferment for up to three years in most cases.

Check with your student loan provider or the federal student loan borrowers website to see if your situation may be applicable for a deferment and the limitations and guidelines for repayments after your deferment has ended.

How Do I Request a Deferment?

To request a deferment, you will need to submit the proper forms to your loan service provider.

The best way to find this is by going to your student loan service page. This is where you would regularly view your loans and payments.

Depending on your circumstances, you will choose the proper deferment reason and submit the form requesting a deferment.

Make sure that you are requesting a deferment for the proper reasons and with the proper form.

Submitting the wrong form for your situation could delay your deferment and will leave you responsible for making payments until the situation has been rectified.

If you are unsure about which form to use, you can contact your loan provider. They can help you choose the right for your circumstances.

What is Forbearance?

A forbearance, much like a deferment, is a delay in payments for your student loans.

General forbearance and mandatory forbearance are the two types of forbearance available, each with their own set of rules and time limits.

General Forbearance

• Your provider will decide if you meet the necessary qualifications for this type of relief. You may qualify for a general forbearance if you are currently unable to make your monthly loan payments and you have Direct Loans, FFEL Program loans, and Perkins Loans.
• A general forbearance is granted for a 12 month period, at which time you can reapply if you still find yourself in need. There is a three year cumulative limit to forbearance requests for Perkins Loans. Direct Loans and FFEL Program loans do not have a limit for the number of requests. However, your loan provider may implement their own limits, so make sure you are aware of their guidelines.

Mandatory Forbearance

• This is a type of forbearance granted for certain internships or military requirements. An example of this would be someone serving in the National Guard. This type of forbearance is also available in certain financial situations. 
• Mandatory forbearance is available for periods of 12 months at which time you may reapply if your circumstances remain the same.

How Do I Know if I Qualify for Forbearance?

General forbearance can be requested when you are having trouble paying your loans due to financial difficulties, medical bills, changes in employment, and other reasons provided by your loan servicer.

Mandatory forbearance can be requested by those who meet the requirements.

In a Medical or Dental Internship, Total Monthly Payment is 20% or more of Total Gross Income.

How Do I Request Forbearance?

As with the deferment, to request a forbearance, you will need to submit the proper forms to your loan service provider.

Make sure that you are requesting a forbearance for the proper reasons and with the proper forms.

Submitting the wrong form for your situation could delay your forbearance.

This can also cause difficulties when trying to rectify your situation.

Again, if you are unsure about which form to use, you can contact your loan provider, and they can help you choose the right form for your circumstances.

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When submitting your forms, you will be asked for supporting documentation validating your need for forbearance.

The type of documents will differ slightly, depending on your specific case.

This is what gives you the justification for mandatory forbearance.

This will be the support that shows that you are currently in need of delayed payments.

What is the Difference Between Deferment and Forbearance?

The main difference between deferment and forbearance is that you will have to pay accrued interest during the period of relief.

Many of the options for deferment do not require you to pay interest throughout the period of deferment.

You are responsible for paying the interest during forbearance periods.

You will need to check the specific guidelines for your eligible program about interest and time limits.

Which One is Right for Me?

Choosing the aid option that is right for you is a personal decision.

Not everyone has the same circumstances so it is best to know your options.

You will want to check what you are eligible for and see which matches your specific needs.

SUMMARY

Life can throw you some curveballs, and facing uncertain times can raise stress levels.

Knowing that you have options with your student loans can help relieve stress. You should never ignore your student loan payments.

It is best to understand your options and take control of the situation.