YO has the best advice if you are in trouble paying federal loans. I will add one bit of advice though. Finding a lender to consolidate federal debt is not going to be easy right with the economy in the state it is in and with FFELP lenders leaving the business day and night.

If you are considering a consolidation of federal loan debt you will likely need to go through the government’s Direct Loan program to consolidate.

That would depend on if you have Federal Student Loans or not. If you DO NOT, then I can’t advise you. If you DO here are some suggestions.

Ask your lender for an economic hardship deferment form and apply.

If you don’t qualify for that, then there are three or four other options. One an unemployment deferment for if you work part time or are unemployed.

Second is the forbearance.

Third, are what is referred to as an income sensitive payment. Depending on your lender they may call it something else, but tell them that is what you want and they should know would it is.

Fourth, consolidation. Federal Student Loan Consolidation is FREE. You choose your lender. I suggest researching lenders. More importantly ask them will you limit my forbearance time. Consolidation in essence gives you a new loan and renews your forbearance and deferment time. Rates change for federal student loans every year in July. You may want to make consolidation your absolute last resort because once you do you can’t do it again and you are stuck at your rate you locked into.

The last few things I can tell you is first call your lender for help. If you don’t receive adequate help then call your guarantee agency for some advice. Next call your school for advice too. Lastly read your master promissory note which is your contract, which has all of the information, excluding the consolidation information, that I just wrote you above. If you can’t find that then go to FAFSA.

Disclaimer

This is in no way is a guarantee of success. All information is available at this persons disposal and is contained in the contract he/she signed. This is advice and an illumination of the information person signed that they read and understood prior to receiving the loans.

I’m not a finance whiz or familiar with all the laws regarding student loans. My advice is to pay what you can, but never miss a payment. At least that way, it shows you are at least trying and it might keep you from going into default until you can come up with a better solution.

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