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Millions of students discover at some point they cannot make their loan payments. Unfortunately there are hundreds of thousands who simply quit paying rather than finding out if they qualify for student loan debt relief. Debt relief programs give you a chance to take a breather of sorts while you get your finances back in order or until you are able to find a job.
The reasons people fall behind in their loan payments are as numerous as the stars in the sky. Common reasons include being unable to find a job, too much credit card debt, loss of a job, unexpected major expenses, military service or even a disability. Most of these reasons will qualify you for loan relief, but having too much debt is normally not one of them. But if you are unable to make your loan payments for any reason, it is critical that you contact the lender or the college which issued the loan.
There are three main student loan relief programs.
Deferment
A student loan deferment is a program that allows you to skip making loan payments for a defined period of time. You do not have to pay interest on the loan during that time if you have a loan that is one of the following:
- Subsidized Direct or FFEL
- Stafford loan
- Federal Perkins Loan
If your loan is unsubsidized then you must pay the interest either as it is accrued or through interest capitalization.
The three most common reasons that qualify students for loan deferments include returning to school, economic hardship and inability to find a job. But other reasons include maternity, public service or disability. Student loan debt relief through public service refers to those who serve in the military or public health, or join the Peace Corps.
The military service deferment applies to those who are called into active duty for war or a national emergency. The economic hardship deferment can be effective for up to 3 years.
Return to School
If you return to school at least half time then you may request relief from student loan debt. People who lose their jobs or graduating students who are unable to locate work sometimes re-enroll in a degree program. While attending school you can ask for loan relief. But keep in mind that you will have to pay for your new classes which will increase your debt if you borrow the money.
Forbearance
Student loan forbearance is slightly different from a deferment. When you do not qualify for a deferment, you can request forbearance. Your loan payments are postponed but interest continues to accrue no matter what type of loans you owe. Forbearance is granted for economic hardship, some types of disability or other issues. Forbearance is approved by the loan servicer.
The one thing you should never do is let your loan go into default due to lack of payment. No matter the amount of college debt student loan relief can provide important financial help when you are having financial problems.
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