 TITLE: How Do I Defer My Student Loans? CONTENT: Alternatives to Deferment and Forbearance\n-----------------------------------------\nStudent loan deferment and forbearance can be useful options when you have a temporary setback that makes it hard to make your payments, such as losing your job. Missing a student loan payment has consequences, including potential damage to your credit score, and deferment can help you avoid them. However, you're essentially \"kicking the can down the road,\" and will eventually have to make payments again—potentially larger ones if unpaid interest accrues during the deferment.\nDeferment can be a solution for temporary financial issues that make it difficult to pay your student loans. If you have federal student loans and your financial issues are longer-lasting—for example, you've entered a low-paying career field—an income-based repayment (IBR) plan may be a better alternative.\nIBR is one of four income-driven repayment plans the federal government offers for borrowers whose federal student loan payments are high relative to their incomes. An IBR plan permanently reduces your monthly payments, gives you 20 to 25 years to repay your loan, and may even forgive the loan if it's not paid off in that time.\nIncome-based repayment works like this: If you have federal student loans for undergraduate studies, PLUS loans for graduate education or consolidated federal loans that don't include a parent PLUS loan, complete the online application through the Department of Education or contact your loan servicer. Once you're approved, your new monthly payment will be calculated based on your income and family size.\nIf you qualify, you'll have either 20 or 25 years to pay off your student loan, and your monthly payment will be capped at either 10% or 15% of your discretionary income, which is the amount of your adjusted gross income that exceeds 150% of federal poverty guidelines, based on your state and the number of people in your family.\nTo maintain your eligibility for the IBR plan, you must \"recertify\" your income information each year; if your income changes, your loan payment amount may change too. However, your payment will never be higher than it would have been under a standard 10-year student loan repayment plan.\nThe downside of IBR is that you'll be in debt for much longer than you would have been under a 10-year student loan repayment plan. Carrying this debt can make it harder to qualify for other loans, and if you miss a payment, it can negatively affect your credit. The upside, though, is that if you still haven't paid off your loan after 20 or 25 years of making your payments on time, you'll be eligible for student loan forgiveness, which cancels out any remaining balance. END