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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 my request a deferment which is a temporary postponement of principal and interest payments.  During periods of deferment, the government will pay the interest that accrues on the subsidized portion of your debt.  The interest that accruess on the unsubsidized portion of your debt will be capitalized, i.e., added to your principal balance.  It is this new balance upon which future interest will be charged.  Federal loan borrowers are eligible for a maximum of three years of deferment. 

The types of deferment available to you on your Federal loans are:

  • Unemployment
  • Economic Hardship
  • Graduate Fellowship (full-time)
  • Rehabilitation Training (full-time)
  • Military Service
  • Half-time enrollment in an eligible school

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 IBR and PAYE, the government will pay the interest on the subsidized portion of your debt for three consecutive years if your payments do not cover that interest. You will be responsible for the interest accruing on all other unsubsidized loans. 

If all else fails, request forbearance.  During periods of forbearance, you will be responsible for the interest that accrues on your entire debt.  Federal loan borrowers are eligible for a maximum of three years of forbearance.