What are My Options If I Cannot Make Federal Student Loan Payments?

A recent Brookings Institution study estimates that 40 percent of federal student loan borrowers who entered repayment in 2004 will default by 2023. There are many reasons why your student loan bills could become difficult while you are in repayment. You could lose your job or succumb to a chronic illness. Regardless of what causes financial hardship, you may have several options that could help with payments until your situation improves. Economic hardship deferment: The Department of Education may allow you to seek an economic hardship deferment if you are temporarily unable to make payments. You can seek an economic hardship deferment for up to three years (does not have to be consecutive) if you meet one of the four criteria required by the Education Department. For instance, this may be an option if your income is less than 150 percent of the poverty line in your state. Interest will continue to accumulate on your unsubsidized loans during the deferment period. Forbearance…

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