Federal student loans can provide the financial means to pay for post-secondary education expenses so you can focus on your studies instead of worrying about how to pay for tuition and supplies. However, you might find repaying federal student loans difficult after graduation, particularly if you cannot immediately secure a job in your career field. If you cannot make your federal student loan payments, you may be eligible for several options.
Forbearance
Forbearance is a solution that allows you to temporarily suspend student loan payments for a specified period of time, usually between six and 12 months, because of a temporary financial hardship. During the forbearance period, you do not have to make your regular student loan payments. However, in most cases, interest on your federal student loan balance continues to accrue during the forbearance period. Also, you may have to provide evidence of financial hardship to qualify for a forbearance.
Deferment
Like forbearance, deferment suspends federal student loan payments for a specified period of time. However, whether you qualify for this option hinges on the reason for requesting the deferment. Typically, you can request a deferment if you become unemployed, return to school, begin or resume active military service or incur a disability. The length of deferment depends on how long the reason lasts. You will need to provide evidence of the reason for deferment to qualify.
Alternate Repayment Plan
If you are working but cannot make your current federal student loan payments, you may qualify for an alternate repayment plan. For example, your lender may grant lower payments calculated as a percentage of your income. It may also grant a graduated repayment plan, which permits a payment reduction for a specified number of years, followed by periods of increasingly higher payments. Consolidation of your federal student loans into a single loan may also help you lower your payments.
Considerations
Contact your lender as soon as you realize you will not be able to make your current federal student loan payments. Falling behind on your payments can result in late fees and damage to your credit score. If you default on your student loans, your lender may pursue collection through wage garnishment, bank account garnishment or foreclosure of your home. Unlike private creditors, it can take these actions without a lawsuit or court order. Also, default will make you ineligible for any future student loans.
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