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How To Defer Your Student Loans

Get student loan relief with simple student loan deferment options from your lender ShareThis

You can delay monthly payments on your student loan balance by properly requesting and getting a deferment. The advantage of deferments is that you will get some breathing room if your monthly income is lowered by unemployment or you are falling behind on your bills. The disadvantage of getting a student loan deferment is when you take your eye of the ball and forget to get your finances straightened out, and when the deferement ends you are back in the same tangled mess again.

Another big disadvantage on deferments is that if you have an unsubsidized student loan, interest continues to pile up. However, many lenders, recognizing the difficulty of collecting ongoing interest payments, usually defer charing borrowers this interest; instead, they do what’s called “capitalization” — they add accrued interest to the principal balance of your student loan once your deferment runs its course, perhaps six months later.

The begin with it’s important to state right here at the outset that not everyone will qualify for a student loan deferment. If your student loan is in default, you will not qualify. You may likely be eligible for student loan forebearance in this instance.

Nonetheless, deferment of your student loans stands the best chance of getting back on top of what you owe for college loans and paying off your student loan debt according to the loan amortization you originally agreed to when you were in school.

Federal loan deferment options for you will differ from another student. Most student loan borrowers will be eligible to get deferments in the following circumstances:

  • -Military deferment
  • -Unemployment deferment
  • -Financial hardship
  • -Medical conditions or rehabilitation program
  • -Returning to college (at least half-time schedule required)
  • -Enrolled in a graduate fellowship program
  • -Volunteering to serve in the Peace Corp
  • -Full-time career as a corrections officer or a law enforcement officer

While the options listed above relate primarily to federal government loan programs, it is also encouraging to know that private lenders have also rolled out their own deferment programs to help offer student loan relief to their customers. The best way to find out what programs are available is to pull out your loan papers or your latest loan payment invoice and find the customer service toll-free phone number, and call right away to locate the exact program conditions and talk with a deferment specialist. Get everything in writing. They might be able to direct you to a page on their company website, or they may email you the information, or lastly, they might just mail out the deferment application details and enrollment form they rely on to keep loans out of default. Whatever steps you need to take, take them today. Get started. Make the decision to do what it takes to stop the worry, the pain, and the anxiety these student loans are causing you.

A wise man once said: “Getting started is half done.”

Take that advice and act on getting a deferment today on your overdue student loans. Regroup. Set a plan. Get your monthly budget in order. Maybe you’ll need to sell things you no longer need to realign your budget. Maybe you’ll need to drop cable or monthly subscriptions services or cook at home for 6 months versus going out to local restaurants with friends. Make the call. Take the steps. Do the hard work now to get your student loan debt under control, then when your loan deferment ends, you will be able to make your monthly student loan payments on time, and eventually you will have your college debt paid off in full.

Getting your college student loan defered means getting the facts on your options. Here’s our Top 5 places to start looking for ways to postpone repayment of your loans. They are an excellent place to start your search for student loan relief:

www.Nolo.com — Options you can use to defer making student loan payments until your financial situation turns around.

www2.ed.gov — Options for financially-challenged students who owe too much and earn too little from “Federal Student Aid Borrower Services.”

www.studentaid.ed.gov — Rules for postponing repayment of student loans, direct from the source.

www.peacecorps.gov — Volunteers who have outstanding debts under one of the federally administered or guaranteed student loan programs qualify for certain relief during their Peace Corps service.

How Returning to School Can Help Defer Your Student Loan Repayments


By Hilary Bowman

Did you know that by returning for an advanced degree in your field or embarking on a new field of study, you can qualify for a student loan deferment? Indeed, you will not rid yourself of the debt, but you will be allowed more time to repay what you owe. You can land a job based on your present degree, attend further classes at least half-time, and defer payments until you are better equipped to repay.

Qualifying for Deferment

Qualifications you must be met to defer student loan payments. Transferring to another school does not automatically mean you have to start repayment. As an example, Federal Stafford loans, and others, do not ask for repayment as long as your are registered as a full-time or half-time student in any accredited school. Be prepared for some prodigious paperwork. Among required documentation, you will need to complete and submit a deferment form to notify your lender of your plans and status as a student. You will need to offer proof of enrollment.

One Class Does Not Cut It

Be aware that just signing up for random classes is not going to qualify you for deferment. You should talk to a school counselor or call the toll-free customer service number of your lender or agency. You need to inform your previous school of your transfer status. They are obligated to inform your lender of your status so you do not want them assuming anything. You must make a serious effort to complete any additional educational objectives and these must be known to your lender or agency as well as your previous and present educational institution.

Tight Finances, Poor Job Market

Maybe your finances are very tight and you are falling behind on your payments. Or maybe the job market in the offing does not look too promising. Either of these would be a good reason to get additional training or educational experience. At any rate, going back to school will add some well-received bullet points to your academic achievements for a little boost in the job-seeking world.

Action Plan for Student Loan Deferment

Determine a workable plan of action on how and where you will return to school. Make an appointment at the financial offices of your original school and those of your new school, if you are transferring. They need to know your long-term goals and you need to prod them for advice on how you can best meet your objectives. After returning or transferring, you will have to supply all affected with credentials of acceptance into your new educational program.

Gather It All Up

Though it may seem tedious, it is necessary for you to collect and review all your loan, agency, and scholarship and grant programs that have been given or are now due. Federal Stafford loans and Federal Pell grants among them. Contact your lenders as soon as possible and have them email, fax, or mail any required deferment forms. Or go to their websites and download the appropriate forms. Complete these a best you can and then approach counselors for any guidance you may need to meaningfully round them out.

Back to school or advanced degree pursuits is the best way to put your student loans on hold. And this move will help you buy time to get your financial house in order while affording you the opportunity to get yourself well-credentialed for when you finally do enter the job market.

Hilary Bowman is the author of this article. She works successfully as a financial advisor with years of expertise on Unsecured Loans. Hilary publishes informative articles about loans for bad credit and other financial topics at FastGuaranteedLoans.com

Article courtesy of Hilary Bowman

Student Loan Repayment: How To Postpone, Cancel Your Student Loan Debts


By Roger Guzman, M.D.

A student loan payment can be deferred or cancelled altogether, did you know this? If you have been ill or have not been able to get a job, there are ways you can have them deferred or cancelled. What you cannot do is default on the payment.

Sometimes the situation is temporary and so you can apply for a postponement of payment or just to lower the amount you have to pay. The period when you are granted this relief is called deferment or forbearance. What is the difference between the two? The government will pay the interest on deferment whereas for forbearance, the interest will continue to accrue.

That is why you have to learn about the options before defaulting on the student loan payment. Otherwise, the ramifications are negative. Not only will defaulting damage your credit, but it will also increase your loan a lot because the collection fees are added to it. In some cases they can even garnish your paycheck and take your tax refund.

So what are the student loan payment options if you are not able to meet the monthly obligation? You can apply to postpone payment through forbearance and deferment or have it altogether eliminated through cancellation of the loan. You can also have the loan discharged through bankruptcy. And there are other options as well.

For now, let us see how to go about applying for deferment or forbearance. A deferment will allow you not to make a student loan payment for a definite period of time. This is usually granted when you are going back to school, or being unemployed or in financial difficulty.

You are qualified for a deferment if you have not defaulted your student loan payment or is under the grace period which means you are within six months from graduation. Another point that will help is if you have been granted a forbearance or a deferment before. How do you get this? Contact loan holder and request for the appropriate form.

The reasons for which you are granted a forbearance are unexpected personal problems, ill health, monthly payment is more than 20% of the income and inability to pay within the maximum term which is usually 10 years. To apply, contact the holder of the loan and explain the situation and they will provide you with a form to fill out. Usually, the forbearance is granted one year at a time.

Student loans can also be discharged through bankruptcy. You have to prove to the court the severe hardship you are undergoing based on your income and expenses and how long it will take to get out of the situation you are in. You have to show them to how hard you tried to pay your debt.

Now let us go to the best part which is how to cancel your student loan payment. As for other cancellations, there are conditions under which this can be done. They are listed below but tread carefully as some conditions are just for deferment or cancellation or for both.

  • If you are permanently disabled, you can cancel your loan.
  • After your death, the one who is working on your last papers can also apply to cancel your debt.
  • If you or your dependents and spouse get temporarily disabled, then you can apply for deferment for up to three years on loans made before July 1, 1993.
  • You can also apply for deferment for loans made after June, 30 2009 if you are unemployed or undergoing economic hardship. The same is true if you are enrolled in a rehabilitation program.
  • If you are teaching needy people or a member of a uniformed service, cancel or defer payments.
  • If you are enrolled half time studying at an institution of learning, you can defer payment.
  • If you are providing service other than teaching, to needy people or working as law enforcement person, you can cancel some older Perkins loans.
  • You can also cancel your loan if you have been a victim of identity theft with the signature forged on loan application or attended a trade school that closed before you finished the program or officials falsely certified you will benefit from signing up.
  • Doing community service or working as nurse or doctor during residency can qualify you to cancel or defer payments.
  • Those who withdrew from school and did not get a refund and finished only 60% of the course can have their loan cancelled up to the refund amount along with the accompanying interest and fees.
  • The Congress also added an additional condition that will allow relatives of eligible public servants or victims of the September 11 to cancel or defer loans.

There you have the information on how to cancel or defer your school loans. You may not be able to get all but getting rid of a portion will be a help. So call the loan holder or the Federal Student Office at 1-800-621-3115 or go to http://www.ed.gov/offices/OSFAP/DCS/index.html. Who knows, you may be able to cancel or defer your student loan payment.

Please visit these sites for more help where you can sign up for free to receive alerts and tips delivered right to your email inbox:

Student Loan Payment

http://www.debtchallenges.com/collegefinancialplanning.html

Brief Biography: Dr. Guzman worked for the Atlantic Health Corporation and was consultant to St. Joseph's Hospital, Sussex Mental Health Clinic, and St. Stephen Mental Health Clinic for many years. He was Director of Forensic Psychiatry at Centracare for ten years and published numerous articles, including financial ones in the Journal of the American College of Forensic Psychiatry and other medical magazines.

Copyright © February 4, 2010 Roger Guzman, M.D. (Student Loan Payment, Here's How to Defer or Cancel It.) All Rights Reserved. You may copy and publish this article as long as the text, the author's name, the active links and this notice remain the same.

Article courtesy of Roger Guzman, M.D.




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