The Economic Hardship Deferment - Avoid Defaulting on Federal Student Loans
In a troubled economy, working Americans are struggling to meet basic expenses. Affording repayment of federal student loans is challenging because housing, food, and energy costs continue to inflate while real earning power decreases.
When you're in deep financial trouble and have become or are about to become more than 90 days delinquent on repaying your federal educational loans, you are in danger of defaulting. To avoid having this situation ruin your credit, read this brief discussion of why you should contact your lender to see if your circumstances qualify you for the federal economic hardship program. If you qualify, the federal government will pay the interest on your subsidized loans while in deferment.
Many education loan borrowers think that if they are employed full-time they must repay their student loans. However, the federal government provides an economic hardship deferment option for people whose payments would equal more than 20% of their gross monthly income. If you take the time to request this paperwork from your educational lender, read through and complete the worksheets, and return the signed form to your lender, the financial institution may be able to grant you relief from your payments.
Why is this deferment available? Just because you are employed full-time does not mean that you are earning enough to repay your student loans according to federal guidelines. Just like any other federal program, this program is intended to allow you to pay basic expenses without undue hardship from education debts.
Instead of ignoring those collection calls from your educational lenders, go to their website or give them a call and request deferment paperwork. If you do not qualify, your lender may have other options like forbearance to relieve your situation. The two-page worksheet to determine if you qualify based on your income status is truly worth 30 minutes of your time. Find out about your options today for peace of mind tomorrow.
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