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How to Reduce Student Loan Payments in Times of Crisis

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In times of crisis, many people have problems paying their expenses, including their monthly student loan payments. So, what are your options if you need help.

Despite what your circumstance might be, it is always important to contact your loan servicer for any changes or questions you may have on your student loans. Your servicer is there to help you and inform you on what the best option may be for your specific situation. They will supply you with the proper paperwork you need to fill out and help you determine what repayment options are available.

Before you explore your options, you should know if you have a federal student loan obtained through the U.S. Department of Education or a student loan from a private lender. Federal student loan borrowers can identify their federal loans and servicers by logging into the Federal Student Aid website with their FSA ID or calling the Federal Student Aid Information Center (FSAIC) at 1-800-433-3243.

Options for When You Can’t Pay

Under certain circumstances, and depending on what type of federal student loan(s) you have, you may be eligible for a deferment or forbearance. This will allow you to temporarily postpone or reduce your monthly payments, and in some cases, help you avoid going into default.

Private student loan borrowers should contact their lender to learn about repayment possibilities, such as forbearance or deferment or alternatives like rate reductions, extended loan terms, or other loan modifications.


Deferment is a temporary postponement of payment on a loan that is allowed under certain conditions. Depending on the type of federal student loan(s) you have, the government may pay the interest that accrues during deferment. Most deferments are not automatic—you will need to submit a request to your student loan servicer, often on a form. Also, for most deferments, you must provide your student loan servicer with documentation to show that you meet the eligibility requirements for the deferment.

If you’re having a hard time making your federal student loan payments, you may be able to qualify for an Economic Hardship Deferment or Unemployment Deferment depending on your individual circumstances.


If you do not qualify for deferment, forbearance may be an option to help you temporarily suspend or reduce your monthly federal student loan payments.

A general forbearance or “discretionary forbearance” can be requested if you are temporarily unable to make your monthly student loan payment due to various reasons including financial difficulties, medical expenses, and changes in employment. For federal student loans, this may be granted for up to 12 months. Loans will typically accrue interest during forbearance, so if you’re able to, try to pay at least the monthly interest to avoid interest capitalization. If you require more than 12 months of forbearance, you must reapply. In order to apply for forbearance, you must contact your loan servicer. Be prepared to supply them with any paperwork or documentation they may need to process your request.

It should be noted that during time of crisis related to a local or national emergency, natural disaster, or other circumstances identified by the U.S. Department of Education, an administrative forbearance may be granted to the student loan borrower.

Switching to a New Repayment Plan

If you are a federal student loan borrower who has had a significant decrease in income, another option might be to switch to an income driven repayment plan (IDR) . Income driven repayment plans base your monthly payments on your income and family size. In some cases, your payment could be as low as $0 per month, however, interest will most likely still accrue. If you are already on an IDR plan but have had a change in income, you can always contact your loan servicer via phone or online to have your payment adjusted according to your new income.

If you have private loans, an income-driven repayment plan typically won’t be an option, however, your lender may be able to work with you to come up with a new repayment plan. By allowing you to make smaller monthly payments, this can help get you back on your feet and avoid any chances of going into default. So, reach out to your lender if you’d like to explore this option.

Watch Out for Scams

Finally, it’s important to beware of unsolicited offers from companies that promise an easy solution to student loan woes. The solicitation may even appear to be affiliated with the government or represent government programs. Scammers might try charging considerable fees for information that can be obtained for free from the Department of Education or a private lender. They might also attempt to steal personal information that can be used to commit identity theft.

To learn more about federal student loans and repayment options, start with the Federal Student Aid website. You can also find information from the Consumer Financial Protection Bureau.

Note: Financial Aid terms including limits, eligibility, interest rates and repayment options, are regulated by the U.S. Department of Education and are subject to change. For the most recent information and updates, consult the Federal Student Aid Office of the U.S. Department of Education website at:

This article was originally published by our partners at iGrad. You can find the original article here.