What Happens if I Can’t Pay My Student Loans?
If you’re falling behind on your student loans, you may be worried that your wages will be garnished or your tax refund will be taken. Bankruptcy no longer erases student loans, but there are other ways to address the situation.
Even if you’re having financial problems, it’s important to keep paying your student loans. You don’t want to default on your loan, which usually happens after you haven’t made a payment for 180 days. Once you default, lenders generally won’t agree to any renegotiation of terms.
Here are five options to look into if you’re having trouble paying your student loans (and aren’t in default):
- Loan deferment. Deferment means suspending repayment for a certain amount of time. Deferment is available for those who are:
- Permanent or temporary total disability
- Completely unemployed
- Enrolled in school
- In the military full-time
- Providing medical care to the needy or in a poor area
- Forbearance. With forbearance, your loan payments are temporarily postponed or reduced due to financial problems. If you don’t qualify for deferment, you might try forbearance. It’s important to remember that interest continues to build.
- Cancellation. There are a few situations that will qualify for your loans to be cancelled completely.
- Permanent or temporary total disability
- Full-time military service
- Public service
- Law enforcement work
- Withdrawal from school or school closure before completion without a refund
- Consolidation. Consolidating all your student loans into one big loan gives you one interest rate, one payment, and could give you a lower monthly payment.
- Income Based Repayment. Although you can’t refinance a student loan the way you can a mortgage, you might be able to receive a more manageable payment plan based on your income. You can find more information at www.ibrinfo.org
If you are having trouble with your student loans you can contact your loan provider for assistance. If you have other loans that can be modified or negotiated you can contact Harold Shepley & Associates, a full service debt relief law firm for relief. We can answer any questions you may have about debt and bankruptcy. Contact us today by phone 1-866-284-7062 for a free consultation or find out more at www.shepleylaw.com.
