Got student debt?

• Author: Park, Minjae

Over the years, government policy has created an array of repayment options for people struggling to keep up with their federal student loans. But these options are difficult to learn about and often difficult to execute. They also differ depending on what type of loan you have, and are not available if you are already in default. Below we've tried to explain them as clearly as possible--more clearly, believe us, than do servicing and debt-collection firms. (Be aware that processing the paperwork on some of these options can take weeks and sometimes longer.)

Deferment: If you're facing unemployment or other economic hardship, you may qualify to postpone repayment of your principal balance for up to three years. If your loan is subsidized, the government pays the interest. If it's unsubsidized, you pay the interest, and if you fail to do so, the unpaid interest will be added to the balance at the end of your deferment. To get a deferment, you have to apply with your loan servicer.

Forbearance: If you cannot make your loan payments you may also qualify for forbearance, which allows you to postpone or reduce your monthly amount for a limited period of time. You're responsible for paying the interest on all loans, including subsidized loans. Your servicer is required to grant you forbearance for up to five years, if you meet the eligibility criteria (you can find them at www. studentaid.ed.gov/repay-loans/deferment-forbearance). Keep in mind that interest accrues during forbearance.

Extended Repayment: If you have total outstanding principal and interest exceeding $30,000, you may qualify for an extended repayment plan, under which you may repay on a fixed or graduated payment schedule for a period not exceeding twenty-five years.

Graduated Repayment: Under these plans, borrowers have the option to pay between So percent and 150 percent of their standard payment, and the payment increases every two years. The plan lasts for ten years, unless it is part of an extended repayment, in which case it can then last up to thirty years. However, the longer the length of the loan, the more the borrower pays in interest. These plans tend to work best for borrowers who are likely to see their earnings increase sharply over time.

Income-Based Repayment (IBR): If you face uneven or modest income, you may qualify for the income-based repayment plan, which limits your monthly payments to an amount based on your income and family size. Your loan servicer should...