immediately the organization that services your loan. You might qualify
for a deferment, forbearance, or other form of payment relief. It's
important to take action before you are charged late fees. For Federal
Perkins Loans, contact your loan servicer or the school that made you
the loan. For FFEL Loans, contact the lender or agency that holds your
loan. For Direct Loans, contact the Direct Loan Servicing Center at
www.dl.ed.gov or by calling 1-800-848-0979 or 1-315-738-6634. TTY
users should call 1-800-848-0983.
Deferment: You can receive a deferment for certain defined periods. A
deferment is a temporary suspension of loan payments for specific
situations such as reenrollment in school, unemployment, or economic
hardship. For a list of deferments, click here. You don’t have to pay
interest on the loan during deferment if you have a subsidized FFEL or
Direct Stafford Loan or a Federal Perkins Loan. If you have an
unsubsidized FFEL or Direct Stafford Loan, you’re responsible for the
interest during deferment. If you don’t pay the interest as it accrues
(accumulates), it will be capitalized (added to the loan principal), and
the amount you have to pay in the future will be higher. You have to
apply for a deferment to your loan servicer (the organization that
handles your loan), and you must continue to make payments until you’
ve been notified your deferment has been granted. Otherwise, you
could become delinquent or go into default.
Forbearance: Forbearance is a temporary postponement or reduction
of payments for a period of time because you are experiencing
financial difficulty. You can receive forbearance if you’re not eligible for
a deferment. Unlike deferment, whether your loans are subsidized or
unsubsidized, interest accrues, and you’re responsible for repaying it.
Your loan holder can grant forbearance in intervals of up to 12 months
at a time for up to 3 years. You have to apply to your loan servicer for
forbearance, and you must continue to make payments until you've
been notified your forbearance has been granted.
Note to PLUS Loan borrowers: Generally, the same eligibility
requirements and procedures for requesting a deferment or
forbearance that apply to Stafford Loan borrowers also apply to you.
However, since all PLUS Loans are unsubsidized, you'll be charged
interest during periods of deferment or forbearance. If you don't pay
the interest as it accrues, it will be capitalized (added to the principal
balance of the loan), thereby increasing the amount you'll have to
repay.
Other forms of payment relief: Graduated and income-sensitive
repayment plans are available. Graduated payment plans provide short-
term relief through low interest-only payments followed by a gradual
increase in payments (usually every two years). An income-sensitive
payment plan offers borrowers payments based on yearly income. As
that rises and falls, so do the payments.
These options can help you during difficult financial circumstances and
help you keep a good credit rating. For more detail on your options, go
to Repaying Your Student Loans.
If you're having trouble with loan payments, don't wait—contact your
loan servicer immediately. If you don't know which organization(s) are
servicing your loan(s), you can research your account information at
www.nslds.ed.gov.
If you have already contacted your loan servicer(s) and you still are
unable to resolve an issue, you might wish to contact the FSA Office of
the Ombudsman, which could help you and the loan servicer
communicate better. The FSA Ombudsman can be reached online at
www.ombudsman.ed.gov or by phone at 1-877-557-2575. Note that
the Ombudsman's office will not relieve you of your responsibility to
repay your student loan.
Don't go into default! If you default, which means you fail to make
your loan payments according to the terms of the promissory note you
signed when you got your loan, you will be in serious trouble. For
more information on the consequences of default, read the Default
discussion under the Repaying tab.
