Direct College Loans
Direct Loans
Direct Loans got you down? The U.S. Department of Education allows borrowers to defer or forbear their direct loans based on certain eligibility requirements. Deferments and forbearances may be granted for any of the following:
Law enforcementRehabilitation programs for individuals with disabilities - Unemployment - Temporary disability - Economic hardship - Parenting young children - School enrollment - Membership in a uniformed service - Community service - Working in the healthcare industry - Teaching or servicing underserved population -
A deferment already occurs on direct student loans while the borrower is enrolled in classes at least part time. Once a student exits school he or she receives another deferment in the form of a grace period. The grace period usually runs between six and nine months in length. During the forbearance, interest charges do not accrue.
Direct Loan lenders must allow for forbearance in the event that the borrower’s loan payments exceed 20 percent of their monthly income. Forbearances are also granted due to a borrower’s personal problems, poor heal, or financial hardship. Cases of natural emergencies and disasters also call for forbearance.
Borrowers who qualify for forbearance or deferment must ask for it. In order to apply, the Direct Loans must all be in good standing. If the loan is in default, it must first be rehabilitated. Financial experts recommend the borrower keep copies of the forbearance or deferment request. It is also acceptable to contact the lender a week or so after submitting the request to make sure it has been received and is being processed. The borrower can also ask when a response to the request can be expected.
As a general rule, after a deferment has been granted, the borrower must begin payments again or apply for another deferment when it ends. To learn more about deferment and forbearance plans for Direct Loans at www.studentaid.ed.gov.
January 25th, 2008 at 8:16 pm
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January 26th, 2008 at 5:21 pm
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