What to do if you cannot pay your student loan payment?

In these hard economic times, what do you do if you cannot afford to pay your student loan payment?

Hopefully you can avoid this by properly planning for college and picking the right student loan consolidation program. But if you find yourself in the predicament, what can you do?

The first thing you need to do is communicate.

I cannot stress this enough. Whether you have consolidated your student loan or not, the first thing you must do is call your lien holder.

The loan officer should be able to present you with options.

If you have multiple lenders or loans, you need to consolidate your student loans.

Consolidating may dramatically lower your bills. Even if your loans have low interest rates and payments, having multiple bills can be expensive. Consolidating many loans into one can decrease your monthly expense by several hundred dollars.

If you have already consolidated, your first option should be to look for a student loan deferment.

A deferment will freeze payments and interest over the life of the deferment usually 6 months to a year. Ask for an economic hardship deferment. If your payments are more than a certain percentage of your income, you will qualify.

I called last year after a surgery and I did not qualify for an economic hardship deferment. I called again just last month and was approved.

Your second option is to get forbearance.

Forbearance is usually granted in a time of need. In forbearance your payments are halted but interest still accrues. This is obviously not as good as a deferment but may get your through a hard time.

These steps will get you through to you are more financially stable. During this time you should focus on paying off credit card debt, refinancing your car or house loan, and saving as much money as you can.

If for some reason the steps above fail, you should ask your family for a loan. You do not want to default on your student loan.

It has been my experience that communicating is the key to getting through tough financial times. Remember, the loan programs want to get paid back, and will most likely work with you if you let them know what is happening.