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Education: Student Loan Debt
 
Education: Relief for Student Loan Debt

Easing the Burden of Student Debt

If you are like many servicemembers, you may be carrying the extra financial burden of repaying your old student loans. If so, then the following article may hold the answer to relieving that burden until you are better able to begin repayment.

Many servicemembers are not aware that they qualify for Student Loan deferment or forbearance.

Deferment:
A deferment means to postpone payments on your principal loan balance. During a deferment, the interest on Subsidized loans is covered by the government. Under the Direct Unsubsidized and Unsubsidized Consolidation Loans you are responsible for the interest that accrues during the deferment period. If you have unsubsidized loans, when you re-enter repayment at the end of the deferment period, any unpaid interest capitalizes (is added to the principal balance).

You may be eligible for several types of deferments; however, most servicemembers only qualify for the "In-School" deferment which requires you to go back to school, and why not, you can use your GI Bill or Tuition Assistance to cover the cost while deferring your student debt and completing your degree!

Huge Education Discounts
Your GI Bill and Tuition Assistance can get you huge discounts on college tuition. Find out how much money you can save while using the benefits you've earned! More...

Forbearance:
Forbearance is an arrangement to postpone or reduce your monthly payment amount for a limited and specific period during which you are charged interest.

If you are temporarily unable, but willing to repay the loan(s), you may ask for a forbearance. The interest will accrue during a forbearance and it is the your responsibility. When you reenter repayment at the end of the forbearance period, any unpaid interest is added to the principal balance.

Unlike deferment most servicemembers qualify for forbearance. You must apply and qualify for a forbearance and the U.S. Department of Education must approve the request in order for a forbearance to be in effect. The process is quite simple.

Eligibility Requirements:
The most common type of forbearance. that servicemembers are eligible for is the "General Forbearance." To qualify for general forbearance. you must meet the following conditions:

  • You must be in the process of repayment.
  • You must be willing but unable to pay the scheduled monthly payment because of a temporary financial hardship.
  • You must select either: temporarily stopping making payments for a specific period of time; OR making a smaller monthly payment (than previously scheduled) for a specific period of time.

    Contact a Federal Student Aid Customer Service Representative for more information about how to manage your student loan debt at 1-800-848-0979 or visit the Federal Student Aid web page.

    Click here if you want more information on how to use your military benefits to return to school, finish your degree, and defer your outstanding Student Loans.


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