Guest Author - D. Lynn Byrne, Ph.D.

The following student loan repayment options are generally available to borrowers.

• Payment Reduction: If you can document a temporary inability to make a full loan payment, many lenders will agree to temporarily reduce the amount of your payment. The key here is that this is usually a temporary situation and your payments will return to their former level at some future point.
  
• Deferment: Many lenders have provisions that allow a borrower to temporarily stop making payments if the borrower meets a pre-defined situation (i.e. is enrolled in school 6 or more hours in a semester, is unemployed, is experiencing a temporary economic hardship, is performing military service, has just had a child or has another temporary disability, etc.). These deferments are usually for a period of 6 months; but may be shorter or longer depending on the loan and the lender.
  
• Forbearance: A forbearance is very similar to a deferment in that it allows a borrower to temporarily stop making payments. However, unlike a deferment, lenders are not required to grant a forbearance. Forbearances are usually granted for situations related to temporary economic hardship (national volunteer service, poor health, personal problems, participation in medical/dental residency programs and situations where payment on federal loans exceeds a certain percentage of your personal income). Borrowers should pursue this option if they do not qualify for one of the categories that would put them into deferment. The period of forbearance will vary depending on the nature of the hardship and some lenders will require you to pay interest during a forbearance, if a forbearance is permitted.
  
• Consolidation: If you are having difficulty making payments on numerous loans, you may wish to consider consolidating these loans into one larger loan. Consolidation can result in an extended repayment period and lower monthly payment amounts. However, you need to keep in mind that you will usually end up paying more in interest because of the extension in time.
  
• Debt Cancellation: Lenders may agree to cancel all or part of your student loan if you become permanently, totally disabled; if you work as a teacher in a school with a documented shortage of teachers; if the school you attended closed before you completed your degree (usually will only apply in the case of a career school or private, for-profit college or university); or if, in a bankruptcy, the court rules that repayment of the student loan would cause undue financial hardship (this is very rare).

To find out if you are eligible for one of the repayment options listed above, contact your lender. If you no longer know which lender holds your note, you may be able to obtain this information from the financial aid office at your university or from the National Student Loan Data System (NSLDS).