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Deferment and Forbearance: When You’re Having Trouble Making your Student Loan PaymentsWhether you’ve only been out of college a few months and are still looking for a job, or you’ve just lost a job you had for the past five years, you may not always be fully financially equipped to handle your student loan debt. When unexpected expenses or hardships hit, even the most responsible borrowers can find themselves struggling to make their student loan payments.
When you’re in deferment, you’ll only be charged interest on your unsubsidized student loans. The interest on your deferred subsidized student loans will be paid by the government. You can choose to make interest payments on your unsubsidized student loans during deferment in order to avoid having any accrued unpaid interest added to your principal student loan balance. For your private student loans, contact your lender to see if they offer deferment periods under certain enrollment, military service, or financial circumstances. Forbearance Forbearance allows you to temporarily reduce or postpone payments on your student loans. You may request a discretionary forbearance in cases of unemployment or financial hardship. Generally, your lender can grant a forbearance for up to a year at a time. When you’re in forbearance, you’re responsible for all interest that accrues, whether the student loans in forbearance are subsidized or unsubsidized. You can choose to make interest payments during forbearance in order to avoid having any accrued unpaid interest added to your principal loan balance. Avoiding Default Just like making on-time car or credit card payments, timely student loan repayment can be a way for you to build credit or improve your credit score. At the same time, every student loan payment you miss can bring down your credit score. Miss enough payments, and your student loans could go into default, which can cause damage to your credit that takes years to repair. The key to avoiding default is communicating with your lenders about your financial situation and requesting a deferment or forbearance if you need one. More likely than not, your lenders are going to be willing to work with you to help keep you from defaulting by keeping your student loan repayment affordable, even when you’re facing tough financial circumstances. NextStudent believes that getting an education is the best investment you can make, and we’re dedicated to helping you pursue your education dreams by making college funding simple. Learn more about Student Loans, Private Student Loans and Student Loan Consolidation at NextStudent.com.
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Article Tags: Student Loan Consolidation, Student Loans, Student Debt Consolidation, Federal Student Loans, Federal Direct Loans, Federal Student Loan, Federal Loan Consolidation, Student Loan Information, Educational Financing, Educational Loans, College Funding, Next About the Author:
Jeff Mictabor is an enthusiast on the topic of student loan issues in the news. He has been writing for the past 10 years for a variety of education publications. He now offers his writing services on a freelance basis.
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