If you can't afford your student loans, you have options.
Depending on your college expenses, you may need to apply for student loans to help you pay for your education, tuition, books and housing. If, following graduation, you discover that your job does not provide you with the necessary income to successfully make student loan payments each month, or a change in circumstances leaves you financially bereft, you may be able to stop making student loan payments either temporarily or, in some cases, permanently.
Instructions
1. Apply for a deferment. With a deferment, your student loan payments can be temporarily deferred and subsidized student loans will not continue to accrue interest. If you owe money on a federal student loan, you may qualify for a deferment due to economic hardship, military deployment, unemployment or re-enrollment in college. Not all private lenders offer deferment.
2. Apply for forbearance. Like deferment, forbearance gives you the option to stop making student loan payments for a set period of time. Unlike deferment, both subsidized and unsubsidized student loans will accrue interest during forbearance. Forbearance may be available if you do not meet your lender's requirements for deferment. Forbearance is available on some private student loans. Review your original loan contract or contact your lender to find out if you are eligible for forbearance on private student loans.
3. Attempt to discharge your student loans through bankruptcy. To have the bankruptcy court discharge your student loans, you must be able to prove that you have made an honest effort to make student loan payments in the past, your financial circumstances prevent you from maintaining a minimal standard of living if forced to continue making student loan payments and your circumstances are likely to continue indefinitely.
4. Default on your student loans. When you default on your student loans, you merely stop making payments on the loan. Defaulting on student loans, however, has severe consequences. Some of the consequences you may face after defaulting are credit damage, a lawsuit, a judgment, wage garnishment, bank account levies and, if the loan was federal, the withholding of your tax returns.
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