If you’re having trouble keeping up with the payments on one or more of your federal student loans, eliminating the debt through loan cancellation is probably an ideal solution to your problem. But canceling a loan is available only in very limited circumstances.
Instead, if you’re not eligible for cancellation, you might be able to get temporary relief from making payments with a deferment or forbearance. Of these two options, getting a deferment of your federal student loans is generally better than forbearance—if you’re eligible. With a deferment, the government picks up the tab for interest on subsidized loans during a deferment period, which makes this route cheaper for most people.
In certain limited circumstances, you might be able to cancel your student loan debt—meaning you don’t have to repay it. Getting a loan canceled isn’t easy; you’ll have to meet specific criteria, take certain steps, and meet particular conditions.
Loan cancellation—also called loan discharge or forgiveness—is available in instances like the following:
To learn more about student loan cancellation, see Student Loan Forgiveness: What It Is, How It Works, and How to Qualify.
A deferment excuses you from making student loan payments for a set period of time because of a specific condition in your life—like returning to school, economic hardship, or unemployment. Interest will not accrue on subsidized loans during the deferment period.
You can generally defer repayment of a federal student loan if:
You might be eligible for a deferment on your federal student loans if you're:
In a forbearance, you stop making payments—or make smaller payments—for a set amount of time. Interest continues to accrue on all types of federal student loans during a forbearance. So, the total amount you’ll have repay over the life of your loan will usually be higher.
Forbearance on federal student loans may be granted for a number of reasons, including:
In some situations, your loan servicer decides whether to grant your request for a forbearance. But in others—like if you’re serving in an AmeriCorps position for which you received a national service award or performing teaching service that would qualify you for teacher loan forgiveness (Direct Loans and FFEL Program loans only)—forbearance is mandatory. (To learn more about deferment and forbearance, see What's the Difference Between Student Loan Forbearance and Deferment?)
In addition to considering deferment and forbearance, it’s a good idea to think about changing your repayment plan and considering a Direct Consolidation Loan.
If you’re having trouble making your student loan payments, you might also consider the different repayment plans that the Department of Education offers for federal student loans. For more information, see Student Loan Repayment Plans and How to Choose a Student Loan Repayment Plan.
If you have multiple student loans, you might be able to lower your monthly payment with a Direct Consolidation Loan. A Direct Consolidation Loan allows you to combine all your federal student loans into one loan for one monthly payment. (Learn more about federal Direct Consolidation loans, see Student Loan Consolidation: Federal Student Loans, Private Student Loans.)
To learn more about getting a loan cancellation, deferment, or forbearance, go to the U.S. Department of Education’s Federal Student Aid website. To apply for any of the options discussed in this article, contact your loan servicer.