How to get a payment deferral for Financial Hardship - Not unemployed

[caramia]

Hello All,

 

I have been searching high and low to find out how to qualify for a deferment, but I just keep seeing the same info over and over. I see general descriptions, but I want to see how to qualify for financial hardship reasons and I am not unemployed.

 

Here is my situation:

 

Federal Subsidized Stafford Loan $16,275 6.8%

 

Federal Unsubsidized Stafford Loan $10,789 6.8%

 

Total Principle: $27,064

 

Out of School. Grace period ends 9/2/12

 

Income: $55k/year

 

Spouse has defaulted student loans about $75k

 

Last year’s adjusted AGI on our joint tax return: $54,944 ( all income was mine )

 

I am looking for a deferment because I have excessive debt. Credit cards, husband’s medical bills, house in foreclosure. If you look at my current debt to income, it is obvious I can’t make the bills that I have now. My first payment will not be due until next month.

 

Can anyone offer any assistance on how I can get a deferment in my situation? The internet is full of general guidelines, of which it seems I don't qualify; however, I have found some short blurbs saying that I may qualify for deferment if I have an excessive debt to income ratio. Does anyone know about this, or have any advice on how to qualify for deferment this way?

 

I would like to get as much info as I can before I call my servicer for options so I know if they are really doing everything they can to assist me.

 

Thanks

 

 

[thankfulheart]

Your perception and the reality of the situation for federal student loans are 2 very different things. According to the federal gov't take your income - poverty level (see charts) then multiply that by 15% and that is what you can "afford" to pay. They don't care about the rest of your debt as it is YOUR debt and not their problem. Harsh, but true.

 

That said, you may have to look at a forbearance for hardship. It means you are willing to pay your loans, but are experiencing a TEMPORARY financial hardship and are unable to. I think it's generally for 12 months.

 

Interest will still accrue and it will get ugly if you let it go on too long. Understand that there are 3 certainties in life: death, taxes, and student loans. They are NOT going to go away until you pay them off under your agreed upon terms or have them forgiven after YOUR expiration date. Eventually, you are going to have to pay on them, period. Also bear in mind that if you have defaulted student loans you will not be able to qualify for a mortgage product backed by the gov't (FHA< VA< USDA) in the future until they are rehabbed and in repayment or paid off. It's sad to see people think they are all ready to app for a mortgage only to find out they can't b/c of student loan problems.

 

Too bad they don't require everyone to sit through a REAL lesson about student loans from the get-go.

 

 

[Txgirl]

Have you talked to your student loan company about your options?

 

There is general forbearance (you are able to pay, but right now have a hardship) and that has a limit of 36 months.

There is also hardship deferment for a limit of 36 months.

There is an income based repayment option. They take into consideration your household total income, total number of people in the house and then you and your spouse's total amount of student loans.

Lastly, Income Contingent repayment program. (I am not sure how this one works)

 

Good Luck

[cputrwz]

You could also look at refinancing with the IBR plan... it might make your payments a little lower. Who is your lender? I am with Sallie Mae and I know I can submit for forebarances online in my account. The hardship one is hard to prove because like the other poster said, if your income supports the payment they won't defer it. But there should be some sort of Voluntary Forebarance you can do. My loans allowed me to do it for a max of 5 years.

 

I wish I only had 27k in student loan debt... I have over 100k. :/

Edited August 30, 2012 by cputrwz