Table of Contents

Are you panicking because you can't afford to pay your student loans? You're not alone. The recession has taken a toll on the finances of many Americans, making it difficult for them to make payments on everything from rent to credit cards to fuel bills. If you're having trouble with your student loan payments, here's what you need to know about getting help.

Student Loan Deferment

A student loan deferment allows you to make no payments for a specific period of time. Interest charges on subsidized federal student loans may be deferred, but only the principal can be deferred on unsubsidized and PLUS loans. If you're already in default on a student loan, you can't get a deferment. Situations that might qualify you for a deferment include:

  • Economic hardship
  • Inability to find full-time employment
  • A disability
  • Family related issues such as maternity leave
  • Service in the military, Peace Corps, or public health

Returning to School

If you're like many people who have been laid off or are about to graduate with limited job prospects, you may be considering going back to school, which would qualify you for a deferment. If you plan to enrollment in an online degree program, contact your lender to make sure you qualify. Enrolling in an online degree program at a school that is eligible to disburse federal financial aid generally results in eligibility for a deferment.

When returning to school, you also need to consider whether or not you can find a lender for student loans. Mark Kantrowizt, publisher of FinAid.org, told the Chicago Tribune that 37 of 60 private lenders aren't currently offering student loans. While the credit crunch has made it more difficult to obtain student loans, help is still available. Make sure to exhaust all your options for federal aid before resorting to private loans.

Student Loan Forbearance

You may also be eligible for forbearance on your federal student loans, which allows you to temporarily postpone or reduce payments. You may be granted forbearance for unemployment, partial disability, or some other hardship. Another option is student loan consolidation, which can combine payments on multiple loans into one monthly payment. However, you won't be able to consolidate federal and private student loans together.

Finally, if you haven't graduated yet, but are concerned about repaying federal student loans, ask your lender about income-based repayment plans. If you work in a low paying job, you may qualify for this program, which becomes available July 1, 2009, and caps monthly payments at a percentage of your discretionary income.


Online Student Loan Relief

Our Featured Education Partners:

Debt Relief Options' partners can assist you to:Debt Relief Options
Get your financial life back on track without having to declare bankruptcy. At debtreliefoptions.org, you'll find long-standing, reputable debt relief organizations ready to help you get out of student loan, credit card, or tax debt more quickly.

  • Lower your monthly payments up to 51%
  • Reduce harassing phone calls
  • Improve your credit rating

Debt Relief Options works with partners who have been designated as Exceptional Performers by the U.S. Department of Education. Get free, no-obligation information today, and take the first step towards achieving financial freedom.