<p>As a family we have PLUS (parents) and Stafford (kids) loans. Both of the kids are out of undergrad, but one is in medical school. We have taken a huge financial hit this past years and have had to use all investment money and savings to stay afloat. I have never had to deal with the student loan as my husband has always taken care of them. While we had the money to pay for college in savings for the kids, he decide to borrow the money and just pay the loans as they were due. At the time it sounded like a good idea!</p>
<p>When we made a quick call to inquire about what we could do to defer the loans for a while, my husband was told about forbearance of the loan. We are not looking to default on the loans, we just need 6 months to a year to catch up at home. We have never missed a payment on the loans, so my understanding is that will help if we need a deferment/forbearance. </p>
<p>I am looking for suggestions or personal stories as to how to go about getting this done. Why a deferment vs. forbearance, or forbearance vs. deferment? Does it matter if the loans are the parent loans or the kids; can we get a forbearance/deferment on the kids loans as we are the ones paying them? I guess if we could at the very least get a deferment/forbearance on the PLUS loans that would be a help. </p>
<p>Are there other repayment plans that might be an option for us? Any information would be helpful.</p>
<p>Stafford loans and Perkins loans can be deferred by the STUDENT while they are in school or if they continue in grad or professional school…and in other circumstances (e.g. Peace Corps). This has to be done by the student, not the parents.</p>
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<p>So I guess the short answer is…you need to determine IF the loans you are talking about are eligible for deferment OR forebearance. Then you need to contact the lenders to see what you need to do to apply for these. One thing is clear…you should do this BEFORE you miss a payment.</p>
<p>The Stafford loan are quit small, so not really an issue. One child is in medical school living off of his current student loan, so he doesn’t have extra money to spare. My main concern is the PLUS loan and further research shows that most likely, forbearance is the way to go, assuming our lenders will allow it. We have to contact each one and request the forbearance; I believe there are 3 or 4 different lenders as the loans have been sold off at times.</p>
<p>I’m assuming that the Stafford loans belonging to the child who is in med school are in deferment? Even though you say the Stafford loans are small, that should be done right away if it hasn’t been done already. Every little bit helps, and IIRC it’s an automatic deferment if the borrower is currently in grad or professional school.</p>
<p>Also, I don’t mean to be at all patronizing, and you may already be doing this, but check out tips on frugal living – almost everyone’s budget has some fat that can be trimmed somewhere. Restaurant meals should be the first thing to go. There are websites w/ frugal recipes. Get an $8-10/month Netflix subscription (great cheap entertainment, especially w/ all the instant downloads available) and drop cable. </p>
<p>Good luck to you. It seems like w/ a drastic change in circumstances, you should be able to get a forbearance.</p>
<p>At one time you could do a PLUS consolidation( gov guaranteed) that took the weighted average interest rate of the loans and extended the repayment period to 10, 15, 20, 25 years depending on the consolidating balance. You also had the option to do forebearance, income, graduated payment plan, multiple times. Accelerated and interest only payments with no penalty. We actually had an interest rate reduction but extended the loan to from the standard PLUS 10 year amortization to a 25 year amortization. Turned to loan to DS soon after he graduated and told him to NOT to accelerate the payments.</p>
<p>Some of the Stafford is for the child in medical school, but some are for the younger child. I hate to say I really don’t know the amount of each, but my husband and I are going to sit down tomorrow and go over each of the loans. </p>
<p>Yes, we have cut back everywhere we can. Finances will get better, but not before our lives are turned upside down. We have not defaulted on anything at this time and don’t expect to; if we can trim a bit more by deferring or forbearance on the student loans that would allow us to breathe a little easier.</p>