What Do I Do if I Cannot Pay my Loans?
If you run into problems repaying your education loans, contact your loan servicer(s) immediately. You will be advised to file a deferment application. A deferment is a temporary postponement of principal and interest payments. However, during periods of deferment, interest continues to accrue on your debt and this interest will be capitalized, i.e., added to your principal balance. It is this new balance upon which future interest will be charged.
The types of deferment available to you on your Federal loans are:
If you are ineligible for a deferment, ask that you be considered for one of the Income Driven Repayment plans. If you have no income, you should be required to pay nothing on your debt!
During periods of deferment and for three consecutive years during IBR and PAYE, the government will pay the interest on the subsidized portion of your debt; that’s the 8,500 you borrowed each year of Law School. You will be responsible for the interest accruing on all other loans.
If all else fails, request forbearance. During periods of forbearance, you will be responsible for the interest that accrues on your entire debt.