Most people think only students who are enrolled in school can get deferments on their student loans. Nothing could be farther from the truth. There are a variety of reasons those with loans can defer or cancel their payments. To learn more, read below for my Tip #4 in a series of “Seven Smart Ways to Pay Off Student Loans Fast.” A new tip is presented each day for seven days. Read also Tip #1, Tip #2 and Tip #3.
Tip #4: Get a deferment, forbearance or loan cancellation during periods of economic hardship.
Practically anyone with an economic hardship can qualify for a loan deferment or forbearance – and some people with severe, chronic financial problems may be eligible to get their loans canceled altogether. Sallie Mae, the nation’s biggest student lender, offers deferments for nearly 20 different scenarios.
Loan payments can be postponed for people who are:
- new mothers re-entering the workforce
- volunteers at non-profit agencies
- military enlistees
- those with excessive credit card debt or unusually high personal expenses
There are many other scenarios under which you may qualify, such as if you’ve had a string of bad luck. Say you went through a divorce, got laid off, then had a car accident — all of which impacted your finances, you can qualify. Also, having a protracted hardship, such as a lengthy medical illness, the department of education may say it’s not worth it to make you pay off your loans — and they can cancel out your loan indebtedness.
Bonus Tip: To claim an economic hardship and ask for greatly reduced student loan repayments, fill out a simple 2-page form called a Statement of Financial Status. Find it online at the Department of Education: http://www.ed.gov/offices/OSFAP/DCS/forms/fs.pic.pdf. Tip #5: Volunteer