Are you financially struggling and uncertain if you can pay your student loans right now? Postponing your student loans is an option. Here is how to do it.
There are a few ways to postpone the payments on student loans if you are having financial difficulties and are unable to make payments. For instance, there is deferment and forbearance. Each of these has differing requirements that you have to meet to qualify. Also, lenders often have income-sensitive loan payment options that could reduce your student loan payment to a level that is consistent with whatever your income happens to be right now.
Deferment and Forbearance
If you are experiencing extreme financial difficulty, if you are in the military, in school part-time, or if you are not employed, you could be eligible for student loan deferment. Apply for deferment through whichever organization or company gave you the student loan. If in deferment, you can temporarily cease making the loan payments for three years. Granted, loan interest does continue to accumulate during this time; however, you can stop making payments. If you have a subsidized federal student loan, the interest that accumulates during the deferment period will get paid by the government. If you have an unsubsidized student loan, the interest that accumulates will get capitalized or added to the principal amount of the loan.
If you have used all of the time allotted for a deferment or if not otherwise eligible to get deferment of your student loans, then you are able to apply to get forbearance. Forbearance can enable you to stop or reduce your loan payments. Or, by contrast, you could opt to pay the interest payments on the loan. Granted, keep in mind that in forbearance interest will accumulate on both unsubsidized and subsidized student loans and you will have to pay this.
Income Sensitive Repayment Plans
Some lenders do offer you the option of having reduced payments during the first few years after college graduation. These income sensitive repayment plans help people with lower pay jobs in their effort to make monthly student loan payments. Payments are a percentage of the monthly gross income, typically from 4% up to 25% of monthly gross income. Usually, borrowers have to reapply for the income sensitive plan every year. Also, as part of the application process, copies of W2s and the tax return must be provided every year.
Finally, keep in mind that it is important to continue making payments until you have been approved for forbearance or deferment. Under no circumstances should you allow your loan to go into default. If the student loan goes into default, it means that you can no longer qualify to pursue deferment or forbearance. At that point, the lender can demand that you pay the loan off in full immediately.