Student loan debt is tough to pay back, if you've just graduated and are struggling to begin a career. Then maybe something else comes along and makes it even worse: you get laid off, or you become pregnant and go on leave, or you get hurt in a car accident and can't work.

Most times, loan companies don't care. Tough luck, they say. You still need to pay.

Student loans are different, though. In those kinds of situations, you can ask for student loan deferment, which means they actually understand what you're going through and care enough to say, "Hey, don't worry. Don't bother making your student loan payments for a while. Just wait till things turn around, no problem."

Whoa. A creditor with a heart. Who'd have guessed?

If your loan is a subsidized one, they won't even add any interest during the deferment period. If it's not subsidized, the interest will keep accruing and will be added to the balance, but you don't have to make even the interest payments, unless you just want to.

Apply for Student Loan Deferment.

But they don't know you're in trouble unless you apply. Student loan deferment is available for a number of specific reasons, that vary slightly depending on when you got the loan, what type of loan it is, and things like that.

The most common reason is economic hardship or unemployment. Duh. But you can also get student loan deferment for disability, being on active duty in the military, being pregnant or staying home to care for your newborn, working for a volunteer organization, being disabled or undergoing rehabilitation, teaching where there's a teacher shortage, and some other things.

Here's a page that has links to the different forms you can use for Direct Loans. You'll need to contact your lender directly to ask about deferment for FFEL, PLUS or Stafford loans. Or contact your school for Perkins Loans.

Honestly, this stuff is pretty complicated, but if you've been to college, you can maybe figure it out. If you run into problems, there are companies that will help you through it for a fee that's probably worth it, or the government student loan offices have ombudsmen (ombudspeople?) to help you also. Just search for student loan deferment, and you'll find lots of them.

Besides student loan deferment, there's also student loan forbearance, which is similar. If you're really lucky, or unlucky, you may even be able to get your student loan cancelled. If you've become permanently disabled, or if you attended a school that closed before you graduated, or a few other things, you may be able to have your student loan entirely cancelled.

If you have more than one loan, you'll need to apply for deferment of each one individually. Something to keep in mind is that applying isn't enough to stop your payments. You need to keep paying until you're actually approved, which may take a few weeks, or else your credit will take a hit for being delinquent.

Now that you're feeling all warm and fuzzy about the student loan people and how they have a heart when times are tough, here's the bad news: Unlike other unsecured loans, student loans don't go away if you declare bankruptcy. You need to file some extra papers besides the usual bankruptcy ones and specifically prove that your student loans would cause a hardship to repay, which isn't always easy.

So if you're worried about facing bankruptcy and you have student loans, apply for deferment or forbearance, or cancellation if possible. Getting your student loans deferred might even give you enough breathing room to avoid bankruptcy, and it's certainly got to help till you get back on your feet.

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4 Comments

Valleygirl
7:42 p.m. February 8
Student loans are a ripoff. Mine was sold three times to different companies... It's like being a slave, you never know who your master will be and one place was a total scam, the internet is full of complaints about them... Everytime i tried to call them they were rude and made up all kinds of excuses about why I'd never be approved fo rdeferment even though I was obviously eligible... Do not give up on this... keep fighting for it. It's a lifesaver.

Anonymous
11:02 p.m. February 8
Some of the ombudsmen act like debt collectors, and i found out they used to work for a debt collecting company. so be careful. make sure their working for your best interest.

greendragon
9:50 a.m. February 9
I went to a college that turned out to be a diploma mill only the didn't even give me my transcripts and diploma, so the only thing I had to show for it was the bills they send every month! I had to hire a lawyer and they went bankrupt and finally I got my student loans cancelled but they already kept the money I paid them for nothing.

SeanJ
3:31 p.m. February 9
People are always pushing you to go to college like you're a failure if you don't. Whats sad is that my cousin went straight to work out of high school, got in a union, and he's making more than me even though I have a bachelor's degree, with better hours and benefits.

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