From Hurricane Maria to the California wildfires, to flooding in the Midwest, Americans have endured quite a few major natural disasters in recent years.
Not only have many lost their homes and jobs, but some students have also found themselves unable to return to school in the aftermath of these calamities.
If you’re a student loan borrower struggling with financial hardship after a natural disaster, you might be able to get help from the federal government.
Here’s what to do about your student loan debt if…
…your loans are on autopay
…you can’t afford your monthly payment
…your loans are in default
…your loans are on income-driven repayment
…you’re working toward federal loan forgiveness
…you can’t complete your school year due to the disaster
If your student loans are on autopay, your lender will automatically deduct a payment from your bank account every month. But if your funds are running low after a hurricane, earthquake or other force of nature, you might want to turn off autopay for a few months.
On the flip side, paying manually might be tough if you’re experiencing power outages. So if you can afford those automatic monthly payments and you’re not already on autopay, consider turning on automatic deductions before the storm strikes. That way, you won’t have to worry about making payments while dealing with everything else going on around you.
This step will also help you re-familiarize yourself with the details of your loans. Gather your account information and find out who your loan servicers are. That way, you’ll know whom to contact if you need help with your student loans.
If you were impacted by a natural disaster, you could qualify for short-term forbearance on your student loans. Your payments will be paused for up to 90 days, meaning you won’t have to pay anything or worry about default during that period.
You can also request additional forbearance time in 30-day increments for a total of 12 months. You can only qualify for this forbearance if the Federal Emergency Management Agency (FEMA) has declared your area a disaster zone, so check the FEMA site for the latest news.
The federal loan servicing team should also reach out to borrowers in impacted areas to inform them of their options. But if you want to get ahead of this process, contact your loan servicer to learn what help is available.
Remember that student loans still accrue interest during a period of forbearance. What’s more, this forbearance is different than the typical forbearance and deferment options offered by the Department of Education.
If you can qualify for either of those, they might also be useful options for pausing your student loan payments until you’re back on your feet.
If you’ve missed payments and your loans have fallen into delinquency or default, you might still be able to get a short forbearance on your student loans. The Department of Education will sometimes suspend collections activities temporarily, as well as allow for forbearance that extends for 30 days and covers past missed payments.
But once the forbearance ends, you’ll be responsible for making payments again, and the interest that has accrued interest that has accrued could capitalize, leaving you with an even bigger balance.
Income-driven repayment plans adjust your monthly bills based on your discretionary income, while extending your repayment terms to 20 or 25 years. If your circumstances have changed as a result of a natural disaster, you can request an adjustment of your monthly payments.
Reach out to your loan servicer, and ask them to recalculate your monthly payment based on your new circumstances. Your payment could go as low as $0 and stay that way for 12 months, so adjusting your income-driven plan (or applying for a new one) could be an even better option than forbearance.
Note that income-driven plans require you to reapply on an annual basis. But If your application deadline is approaching and you live in an impacted area, your loan servicer might grant 15 extra days for you to submit your documentation.
Although the Public Service Loan Forgiveness program requires 120 consecutive on-time payments, you might get some extra time if you’ve gone through a natural disaster.
As long as you make a payment within 20 days of your due date (and within 30 days of the time your area was declared a national disaster zone), your loan servicer will still consider that payment to be on time.
Unfortunately, putting your loans on deferment or forbearance (even the short-term forbearance granted to borrowers impacted by a natural disaster) means you won’t get credit toward PSLF during those periods. You can also check in with FedLoan Servicing, which administers the program, by calling them at 1-855-265-4038.
Some student loan borrowers are still in school when natural disaster strikes and can’t finish up the year as a result. If this describes you, don’t worry about your student loans suddenly entering repayment.
You’ll get an extended “in-school” status until you officially leave school or re-enroll. As a result, your servicer will continue to honor your grace period, so your loans won’t enter repayment until you’re truly done with school.
Protect your finances after a natural disaster
After going through a natural disaster, your first priority should be making sure you and your loved ones are safe. You might also need to call insurance companies to file claims for any damage that has occurred.
Once you’ve dealt with your top priorities, turn your attention to financial matters, such as your student loans. Falling behind on payments could lead to wage garnishment and hurt your credit, but fortunately, this situation is avoidable.
Reach out to your loan servicers to discuss the best path forward to protect your finances and stay current on your debt. And check out DisasterAssistance.gov to see if you might qualify for financial assistance from the state or federal government.
Going through a natural disaster is stressful enough. By staying on top of your student loans, you can rest a little easier knowing your debt isn’t piling up or falling into default.
Interested in refinancing student loans?Here are the top 6 lenders of 2019!
|Lender||Variable APR||Eligible Degrees|
|Check out the testimonials and our in-depth reviews!
1 Important Disclosures for SoFi.
2 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 7.89% APR (with Auto Pay). Variable rate loan rates range from 2.50% APR (with Auto Pay) to 7.27% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of April 17, 2019, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 04/17/2019. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at firstname.lastname@example.org, or call 888-601-2801 for more information on our student loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
3 Important Disclosures for Laurel Road.
Laurel Road Disclosures
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the fixed rate will decrease by 0.25%, and will increase back up to the regular fixed interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
All credit products are subject to credit approval.
Laurel Road began originating student loans in 2013 and has since helped thousands of professionals with undergraduate and postgraduate degrees consolidate and refinance more than $4 billion in federal and private school loans. Laurel Road also offers a suite of online graduate school loan products and personal loans that help simplify lending through customized technology and personalized service. In April 2019, Laurel Road was acquired by KeyBank, one of the nation’s largest bank-based financial services companies. Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. All loans are provided by KeyBank National Association, a nationally chartered bank. Member FDIC. For more information, visit www.laurelroad.com.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown.
All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.49% effective March 10, 2019.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.50% – 7.27%1||Undergrad & Graduate|
|2.50% – 7.12%3||Undergrad & Graduate|
|2.81% – 8.79%4||Undergrad & Graduate|
|2.50% – 6.65%2||Undergrad & Graduate|
|2.55% – 7.12%5||Undergrad & Graduate|
|3.00% – 9.74%6||Undergrad & Graduate|