5 Options for Student Loan Repayment Relief

If you’re having difficulty making your student loan payments, don’t ignore them. Failing to make a loan payment can damage your credit score, and you could get hit with late fees. You have options for working with your loan servicer:

Deferment Links to an external site.is a temporary suspension of loan payments for specific situations such as returning to school, unemployment, or military service. Deferments aren’t automatic. You’ll need to contact your loan servicer to request or renew a deferment and continue to make payments on your loan until it’s approved. Deferments are available for Federal Perkins Loans, Federal Direct Loans, and Federal Family Education Loans (FFEL). Depending on the loan type, either the borrower or the federal government pays the interest during deferment periods.

Forbearance Links to an external site.is the temporary postponement or reduction of payments for a period of time up to 12 months at a time and for a total of three years. Interest continues to accrue during the forbearance period. If you’re experiencing financial difficulty or an illness, your loan servicer may grant you discretionary forbearance. Some situations trigger mandatory forbearance, including participating in a medical internship or residency and having low income relative to your debt burden. It’s up to you to contact your loan servicer to request forbearance, and you must continue to make loan payments until it’s approved.

Loan forgiveness Links to an external site. Links to an external site. allows borrowers to cancel all or a portion of their student loan debt in return for specific types of service. The Direct Loan program offers loan forgiveness for teachers (Teacher Loan Forgiveness Program Links to an external site.) and public service workers (Public Service Loan Forgiveness Program Links to an external site.).

Loan cancellation or discharge Links to an external site. occurs when a borrower becomes totally and permanently disabled or dies, or meets certain very specific criteria for Direct and FFEL Loans and Federal Perkins Loans. Many of these criteria are service based—for example, Federal Perkins Loans may be cancelled Links to an external site. for certain qualifying teachers, librarians, and law enforcement members. Talk with your lender if you think you might qualify.

Consolidation Links to an external site. combines your federal student loans into one loan. This makes repayment more convenient because there’s only one monthly payment. Consolidation can extend the repayment period, giving you a lower monthly payment. The trade-off for lower payments is more interest paid over the long term. To learn more, go to https://studentaid.ed.gov/sa/repay-loans/consolidation Links to an external site..

If you can’t make your payments, contact your loan provider immediately; they will work with you to get you back on track.

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