Struggling With A Student Loan? Ask Your Lender for Help

If you’re one of the millions facing unemployment and staggering student debt, you may find yourself unable to make your monthly payments on your student loans. With the threat of wagestudent loan garnishment and irreparable damage to your credit score hanging over your head, where do you turn for help?


The answer is your lender. There are often different options available for repayment that you can choose to suit your needs and financial situation, but you need to be proactive about finding out what those are. The first step you need to take is to determine whether your student loans are serviced through the U.S. Department of Education or through a private lender.


Options for federal loans depend on the program. You may be able to lower your monthly payment or temporarily put repayment on hold. You can choose from a menu of repayment plans and change from one to another at any time. Possibilities include lower monthly payments that increase over time, an extended repayment period that results in lower monthly payments, and monthly payments based on your income.


Although these kinds of plans may reduce monthly payments, remember that the longer you take to pay down the loan, the more you pay in interest. Federal loan borrowers also might qualify for forbearance or deferment, which can temporarily reduce or postpone payments.


To get help with a federal loan, contact your servicer, the organization that collects your loan payments. Borrowers can identify their federal loans and the servicers for those loans using the U.S. Department of Education’s National Student Loan Data System.


For private student loans, contact your servicer to learn about possibilities such as forbearance or deferment or alternatives like rate reductions, extended loan terms or other loan modifications. On July 25, 2013, the FDIC, the Federal Reserve Board and the Office of the Comptroller of the Currency issued a statement encouraging financial institutions to work constructively with private student loan borrowers experiencing financial difficulties.


Finally, beware of unsolicited offers from companies that promise an easy solution to student loan woes. The solicitation may even appear to be affiliated with the government or represent government programs. Often times, these are attempts to obtain your personal information and commit identity theft, or scams that collect fees for services that are freely available through the Department of Education or a private institution.


To learn more about federal student loans and repayment options, start at Also find information from the Consumer Financial Protection Bureau.

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