If you can't make payments on one or more of your student loans, you may be able to get temporary or permanent relief from making payments.

Learn about your options before you go into default. If you default on your student loans, you will suffer negative consequences. For example:

• Your credit will be damaged.
• Your loan balance will increase dramatically as collection fees are added to the pot.
• In the worst-case scenario, your loan holder will take aggressive action to get the loan money from you, including taking a portion of your paycheck or your tax refund. (For information on how the lender can collect student loans, see Nolo's article What Happens If You Default on Your Student Loans.)

Your Options

If you are unable to make loan payments, some options include:

• postponing payments through deferment or forbearance programs
• eliminating the loan altogether through loan cancellation
• discharging the loan in bankruptcy, or
• considering other, more affordable payment plans or loan consolidation. (For more on this, see Nolo's article Student Loan Repayment Options.)

Deferring Student Loans

A deferment excuses you from making student loan payments for a set period of time because of a specific condition in your life -- such as returning to school, economic hardship, or unemployment.

Qualifying for deferment. You can defer repayment of a student loan if:

• you meet one of the conditions described below (see "Conditions for Canceling or Deferring Student Loans", below), and
• you are not in default -- that is, you have made your payments on time, are in the grace period after graduation, or have been granted other deferments or forbearances.

How to get a deferment. Contact the holder of your loan and request the appropriate form based on the reason you think qualifies you for the deferment.

Obtaining a Forbearance

In a forbearance, your loan holder gives you permission to stop making payments for a set period of time. Interest always continues to accrue during a forbearance. Forbearances are granted for up to one year at a time. In some circumstances, a forbearance may be available even if you have defaulted.

Forbearances are easier to obtain than deferments or cancellations, because they are not tied to the type of loans you have or the date you obtained them -- and they aren't governed by the picayune rules that make cancellations and deferments so hard to come by.

Qualifying for a forbearance. Forbearance on federal loans may be granted for a number of reasons, including:

• poor health
• unforeseen personal problems
• inability to pay within the maximum repayment term (usually 10 years), or
• monthly payments totaling more than 20% of a borrower's monthly income.

How to get a forbearance. To apply for a forbearance, contact the holder of your loan, explain your situation, ask for a forbearance, and fill out the appropriate forms

Discharging Student Loans in Bankruptcy

Very rarely are student loans discharged in bankruptcy. However, it is possible if you can prove that repaying the loan would be a severe hardship for you -- a very difficult standard to meet. Courts consider several factors in making this determination, including:

• your income and expenses
• how long your financial problems are likely to continue, and
• how hard you've tried to repay your debt.

You must file a separate court action in your bankruptcy proceeding supporting your discharge request. You'll probably need an attorney to help you with the procedure. (For more information about bankruptcy, see Nolo's article Bankruptcy FAQ.)

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