MBA Finances

Federal Loans FAQ's

What options do I have if I can't make a payment?

If you have problems making a payment, you should immediately contact the holder or servicer of your loans for more information and to obtain any required forms that should be completed/submitted (if your loans are Direct Loans, contact the Direct Loan Servicing Center).

Often times, students experiencing difficulty making a payment are eligible for a deferment or forbearance. Receiving a deferment or forbearance is not automatic; you must apply for it, and you must continue making payments on your loan until your deferment or forbearance has been granted.

• Deferment:
  A period of time during which no payments are required and interest does not accumulate on Subsidized Loans. In the case of an Unsubsidized Loan you continue to be responsible for the interest.
  
  The most common reasons for a deferment are listed below.
  • Enrolling in school at least half time
  • Inability to find full time employment for up to 3 years
  • Economic hardship for up to 3 years
  • Other deferment conditions are loan specific
  
  For a complete list of deferment types, as well as necessary forms, refer to the Direct Loan Servicing Site.
  
  
• Forbearance
  A forbearance is an arrangement to postpone or reduce your monthly payment amount for a limited and specific period during which interest continues to accrue--no matter what type of loan you have. A forbearance is generally for periods of 6 to 12 months at a time for a maximum of 3 years.

If you temporarily can't meet your repayment schedule but you don't meet the requirements for a deferment, your lender might grant you forbearance.

You'll have to provide documentation to the holder of your loan to show why you should be granted forbearance. For a listing of forbearance types, including necessary forms, refer to the Direct Loan Servicing Site.