How to Get Student Loan Repayment Help
Unexpected circumstances are a part of life. If something has come up and you need help repaying your student loans, this article will help you understand some options you may have.
It’s natural to need help with your student loan repayment. After all, starting out and trying to juggle various financial obligations can lead to financial strain. Or perhaps you’ve faced an unexpected bout of unemployment or some other financial emergency. Luckily, there is student loan repayment help out there.
If you know you won’t be able to make your student loan payments, it’s important to be proactive about reaching out for help. That’s because if you end up defaulting, you could end up with consequences such as paying more fees, a negative impact on your credit, and more.
Contact Your Student Loan Servicer
It doesn’t matter if you have federal or private student loans. If you’re struggling with your monthly payments, the first action to take is to call your student loan servicer — it could be more than one if you have both federal and private loans.
Once you reach your loan servicer, explain your financial situation and inquire about what your choices are. In many cases, you may be able to temporarily pause your payments or even qualify for a lower monthly payment.
When you call, explain your situation and ask about your options. For example, you might be able to pause your payments, qualify for a lower payment, or receive other assistance. If you have federal student loans, you could sign up for income-driven repayment. Calling is the best way to find out what help is available for you.
If you don’t know who your loan servicer is, check your student loan statements. You should be able to see who it is, alongside their contact information.
How to Get Student Loan Repayment Help For Federal Loans
You have a few options if you need help with your federal student loan. Your options will depend on the exact nature of your predicament.
You Can’t Afford the Payments
If you can prove that you can’t financially handle your current student loan payments, you may be able to enter into an income driven repayment (IDR) plan — it’ll be based on your most current income. Depending on the type of plan you ultimately choose, you may be able to have your remaining balance forgiven once 20 to 25 years have passed.
There are several IDR plans to choose from:
- Income based repayment (IBR): Your payments are typically based on a maximum percentage of your discretionary income and forgiven after a certain period of time.
- Pay As You Earn (PAYE): This plan is based on monthly payments that are 10% of your discretionary income, and the remaining balance will be forgiven after 20 years.
- Income contingent repayment (ICR): The percentage of your discretionary income is the same as PAYE, with undergraduate loans being forgiven after 20 years, and graduate degrees in 25.
Another option is to consolidate your loans in to a Direct Consolidation Loan — it’ll extend your loan term up to 30 years, helping you lower your monthly payments. There’s also refinancing to a private loan. Keep in mind that if you take this option, you could lose certain benefits only available with federal student loans.
You’re Interested in Qualifying For Forgiveness
You may qualify for a student loan forgiveness program if you work in certain sectors, like a government or nonprofit agency. Depending on your profession, you might qualify for a student loan forgiveness program. Check with your loan servicer to see what’s available.
You’re Experiencing a Temporary Hardship
Sometimes, all you need is to pause your payments temporarily while you get back on your feet financially. In this case, you can choose to apply for deferment or forbearance.
To qualify for deferment, you’ll have to be in the following situation:
- Facing financial hardship
- Enrolling in a graduate fellowship program
- Serving in the military
- Re-enrolling in school
- Undergoing life saving medical treatments like for cancer
There may be other circumstances in which you may qualify for deferment — it’s best to seek out your loan servicer for assistance.
As for forbearance, you can choose either discretionary or mandatory. If it’s the latter, you’ll need to see whether you’re eligible and your request will need to be approved by your loan servicer. The former will be granted by the loan servicer.
Some scenarios in which you might qualify for forbearance include:
- Serve in the AmeriCorps
- Are facing huge medical expenses
- Facing change in employment
- Facing financial difficulties
- Currently a member of the National Guard
- Serving in a dental or medical residency or internship
How to Get Student Loan Repayment Help For Private Loans
Though private student loan repayment may be different compared to federal student loans, you still have several options.
Private student loans may allow you to take advantage of deferment or forbearance programs, assuming your loan servicer has them. If you can, you may be able to temporarily pause your payments — though it’s a good idea to find out what options are available to you.
However, if you choose to go this route, interest will typically continue to accrue. That means your loan balance will continue growing even if you’re not required to make any payments.
Instead, you can consider student loan refinancing. If you can afford your payments but can afford to make some, refinancing could lower your monthly payments permanently. You can either qualify for a lower interest rate or a longer repayment term.
Refinancing may be your only choice if your lender doesn’t offer deferment or forbearance. Before choosing any lender, make sure to shop around to find the right loan for you — Juno helps you to do so for free through our lender partners.
Whatever types of loans you have, you want to explore your options as soon as possible. You don’t want to risk going into default because you missed your payments. As stressful as it can be, your loan servicer will work with you to figure the best plan forward.
Sarah Li Cain
Sarah Li Cain is a finance writer and a candidate for the Accredited Financial Counselor designation whose work has appeared in places like Bankrate, Business Insider, Financial Planning Association, Investopedia, Kiplinger, and Redbook. She’s the host of Beyond The Dollar, where she and her guests have deep and honest conversations about money affects their well-being.
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