Introduction Paying For and Selecting a College Federal Loans, Private Loans, and How to Tell the Difference Repayment Plans Student Loan Servicers and Ombudsman Offices If You Can't Repay Your Loan Loan Consolidation Programs Loan Cancellation/Forgiveness Programs If Your Loan Defaults Collection Activities Additional Information and Assistance Glossary Index of Resources
If You Can't Repay Your Loan
Circumstances may arise that make repayments difficult. Your loan servicer is supposed to help you understand your options for keeping your loan in good standing. Options to keep your loan in good standing when you are having difficulty making the monthly payments may include:
Ask whether any alternative repayment program is available to lower your monthly payments.
If you are experiencing a short-term hardship and can’t make your scheduled loan payments, your loan servicer may be able to grant you a forbearance. A forbearance may allow you to stop making payments or reduce your monthly payment for up to 12 months. While your payments may be suspended or reduced, interest will continue to accrue on your federal loans.
In certain circumstances, you may be able to postpone paying back your student loans by obtaining a deferment. For unsubsidized loans, interest will accrue during a deferment. The type of loan and date the loan was incurred will affect your deferment options, if any. You can get deferments for most federal student loans in the following circumstances:
- In-school for at least half-time study;
- Graduate fellowship;
- Rehabilitation training program;
- Unemployment, not to exceed three years;
- Economic hardship, granted one year at a time for a maximum of three years; and
- Military service.
To apply for a different repayment plan, forbearance, or deferment, contact your loan servicer.
Loan servicers are supposed to work with borrowers. Unfortunately, they do not always do so appropriately. Borrowers sometimes try to contact a loan servicer to learn more about repayment plans, forbearance, and deferment options, only to face unreturned phone calls, lost paperwork, and other hassles. If you have federal student loans and the loan servicer is not helpful, contact the U.S. Department of Education at: (800) 4FED-AID (800-433-3243) about your forbearance or deferment options.
Private and non-federal loans may or may not have deferment or forbearance options, and the rules vary among lenders. Many private lenders offer deferments for certain circumstances. It is best to discuss these options with your loan servicer as early as possible. For private student loan deferment or forbearance, terms and fees can vary. Your options for deferment or forbearance of private loans may not be as borrower-friendly as the federal program options.