Direct Loans Hardship Deferment?

Q: It gives me a 12 month breather while I put together my life/job/finances so I can start a steady repayment plan. I don't accrue any interest. I just want to know if it affects my credit rating at all? Thanks.


A: It affects your rating negatively. You have shown that you are unable or unwilling to pay back the debt as you originally agreed to do. You will find that it's harder to get loans, if you can get them at all, and that your interest rates will be higher.

Are you considering student loans for college or do you already have them? Get detail information on applying and repaying student loans, student ...

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Lobby Congress, Learn More About Student Loan Consolidation

Reported that Education Secretary Arne Duncan was urging higher-education officials to " think more creatively —and with much greater urgency" about ways to contain costs and reduce student debt, establishing the start of a "national conversation."

We haven't, however, heard a lot from Congress, so we urge you to personally call or E-mail your Representative and Senators to urge Congress to take action on H.R. 2028 in the House and S. 1102 in the Senate. These bills would restore the right to relief through bankruptcy on private loans. Because private loans lack vital protections —such as extended repayment plans, consolidation, and deferment—that federal student loans possess, it is vital that we restore this basic consumer protection to protect borrowers with private loans. And you can say exactly that in your E-mail or phone call.

[Read about a recent report on college student debt .]

As you know, you and your financial situation are unique, so we don't provide specific legal or financial advice, and we encourage you to reflect carefully on your options and to consult a financial adviser.

Student Loan People

A college student loan has given many people all over the United States a chance to further their education, even if they are not making a lot of money. Education student loans can be a big help in paying for college, but what do you do if you find yourself in a position where you can't make the payments either because of a disability or because of economic hardship? A student loan deferment is basically a privilege that allows you some flexibility to repaying your student loans given your circumstances. To apply for deferment based on your economic situation, you must apply every year and prove why you deserve to have your repayment stalled. Here are some eligibility criteria for a student loan deferment:

1. Pregnant or Caring For a Newborn

Tending to a newborn or pregnancy has its own set of challenges. If you are not working, no longer in school, and have attended school within the last 6 months for at least halt-time, you may qualify for the parental leave student loan deferment. You will be asked to provide proof in the form of documentation regarding your current situation. Documents from your doctor documenting the pregnancy or a copy of the birth certificate should be adequate. If you are caring for an adoptive child, you'll need to get a statement from the adoption agency referencing the adopted child's placement. Certification from your school concerning your enrollment status over the previous 6 months may also be required. The deferment has a maximum time limit of 6 months after which you would need to reassess your situation to determine if you are able to start repaying your student loans again or if you require another parent leave loan deferment.