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9 ways to get help with your student loans after a natural disaster

How to avoid default or get more aid if you've been affected.

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Anna Serio
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Student loan servicers generally understand you can’t make repayments when a natural disaster hits. Many have programs to help you avoid default while you’re dealing with the aftermath. You might qualify for additional aid if your family’s finances were impacted. But you can’t take advantage of any of this unless you reach out to your servicer or school’s financial aid office.

Is the coronavirus outbreak considered a natural disaster?

Yes, some private student loan providers like CommonBond and Ascent consider the coronavirus outbreak a natural disaster, making you eligible for natural disaster forbearance. Other private lenders are offering deferment and forbearance specifically for borrowers impacted by the coronavirus outbreak, so check with yours to see what your options are.

The federal government has also paused federal student loan repayments until at least September 30, 2021 and lowered the interest rate to 0%, meaning not making payments right now won’t cost you anything.

You can learn more with our guide to managing your student loans during the coronavirus outbreak.

How to get assistance while in school

Reach out to your school’s financial aid office to find out what you need to do for your specific situation. Chances are your school has procedures in place, especially if a large part of the student body has been affected.

You might want to take one or more of the following steps — depending on your circumstances.

1. Request extended “in-school” status

Need to miss school because of a natural disaster? Ask the financial aid office how to adjust your enrollment status to show you’re still a student who plans to come back. This prevents your student loan grace period from kicking in — which leads to full repayments due in six months on federal loans and most private student loans.

2. Get your financial aid package reassessed

Chances are your family’s finances took a hit after a natural disaster. If that’s the case, ask your school’s financial aid office how you can adjust your financial aid package. You might need to update your FAFSA and CSS Profile to receive more aid from the school.

Don’t be afraid to push back if your package isn’t enough to cover your expenses. You’re in a position to negotiate more free financial aid, such as scholarships, grants and work-study.

If you received any scholarships from outside organizations or student loans from private lenders, reach out to see if you can qualify for more funds.

Will I get less financial aid from my school if my family received federal assistance?

No. Schools, scholarship organizations and lenders generally don’t count federal aid as income. This means receiving federal assistance won’t increase your expected family contribution (EFC) or otherwise negatively impact your financial aid package.

3. Apply for additional financial aid programs

You might now be eligible for more outside scholarship and grant programs designed to help students impacted by natural disasters. For example, the Federal Employee Education and Assistance (FEEA) Fund offers financial assistance to families of federal employees, including college scholarships. You can find resources through your school’s financial aid office.

Typically, you need to submit an additional application to get these scholarships. If you receive additional funding, it could affect the financial aid package from your school.

How to get federal loan assistance

There are several steps you should take to get help repaying federal student loans after a natural disaster. Rather than contacting your school’s financial aid office, reach out to your student loan servicer — that’s the company you’re making repayments to. Most servicers recommend that you call to find out what steps you specifically need to take. Some might even have a dedicated helpline for students impacted by certain disasters.

Here are some steps you might want to take with federal loans.

1. Apply for natural disaster relief administrative forbearance

You can apply for disaster relief administrative forbearance if the area where you live or work has been affected. Some servicers also call this disaster forbearance or disaster assistance. Typically, servicers recommend signing up by phone — especially if you don’t have Internet access.

Disaster relief administrative forbearance works by pausing your repayments for 90 days. It doesn’t pause interest, however. That continues to add up — whether you make repayments or not. However, unlike with most forbearance programs, your servicer won’t add this interest to your loan balance. This makes it slightly more affordable than other types of forbearance.

2. Apply for additional forbearance if needed

Need more than 90 days to get back on your feet? You can apply for up to 12 months of forbearance in 30-day increments once those first 90 days are up. Reach out to your servicer before the first forbearance period is up to request more time. If your servicer thinks you can reasonably start student loan repayments, it might deny your forbearance request.

Still need help after 12 months? You could qualify for economic hardship deferment. This pauses repayments for up to 36 months over the life of your loan, in 12-month increments. Unlike with disaster relief administrative forbearance, the interest that adds up during this time is capitalized and added to your loan balance, making it more expensive in the long run.

Can I qualify for forbearance if I’m delinquent or in default?

You can, though you have slightly different options than borrowers who are current on their repayments. Students who are delinquent can have forbearance applied to overdue repayments and hold off on their next due date for up to 30 days. Students who are in default can request to have collections suspended for 90 days.

In rehabilitation? You can also hold off on repayments for 90 days and either start repayments as you had originally planned or make a large one-time repayment to get you back on track to your original rehabilitation date. Contact your servicer or the collection agency handling your repayments for more details.

3. Adjust your income-driven repayments

If a natural disaster affects your ability to make money and you’re on a repayment plan based on your income, contact your servicer to adjust how much you pay each month. Most have a procedure for handling adjustments to income-driven repayments during a disaster. Reach out by phone to find out what you need to do, especially if you lost any documents you were planning to submit.

What happens if I’m working toward federal loan forgiveness?

Borrowers working toward student loan forgiveness can have deadlines and due dates extended:

  • Document deadlines get pushed back. If there’s a due date for documents — such as a TEACH Grant certification — those are extended for 15 days if you live in an affected area.
  • Repayment due dates are also delayed. Repayments toward Public Service Loan Forgiveness (PSLF) that are up to 20 days late count as on time, if you make a repayment within 30 days of the natural disaster. Repayments that are more than 20 days late won’t count toward PSLF, however.

4. Consider switching repayment plans

Forbearance is only meant to be a temporary fix. If a natural disaster has had a lasting impact on your income or financial situation, you might want to look into a new repayment plan. Consider signing up for income-driven repayments if you can provide the necessary paperwork. You might also want to consider signing up for a longer loan term or a graduated repayment plan, which can reduce your repayments — at least in the short term.

How to get private loan assistance

Private student loans come with fewer disaster assistance options than federal loans. But there are still a few steps you can take to stay on top of your loans. As with federal loans, the first step is to reach out to your servicer.

1. Apply for deferment or forbearance

Not all private student loan servicers offer disaster forbearance. But most offer hardship forbearance, which you can usually qualify for if your income or finances have been impacted by a natural disaster. This typically lasts 90 days or longer. Reach out to your servicer to find out what the process is for signing up. Keep in mind that deferment and forbearance can have consequences. Interest may still build up while you’re not making payments and make your loan cost even more over time. Consider the drawbacks of deferment and forbearance before you sign up with your servicer.

2. Look for local assistance programs

State and other local organizations might offer financial assistance to victims of national disasters, which you can use to stay on top of your student loans. You can learn what programs are available in your area by visiting the Disaster Assistance government website and entering your ZIP code. This site also offers information on other types of assistance you can benefit from after a natural disaster.

How to apply for an SBA disaster loan

4 steps to take with your student loans after a natural disaster

After you and your family are in a safe place, here are a few steps you can take to avoid falling behind on your student loan repayments:

  1. Find out if your area is a FEMA disaster zone. You can check by visiting the Federal Emergency Management (FEMA) website. Your student loan servicer likely also has a list of current disaster zones. You won’t be eligible for disaster relief if you aren’t in one of these areas.
  2. Contact your servicer as soon as you can. The sooner you reach out to explain the situation, the easier it will be to stay on top of repayments.
  3. Opt out of autopay. If you don’t have the money to afford regular repayments, unenroll from autopay while you figure out a new repayment plan and get back on your feet.
  4. Make repayments when you can. Forbearance can make your loan more expensive, since interest continues to add up while repayments are on hold. Only sign up if you really need it.

Bottom line

Schools, as well as federal and private servicers, have protections to help borrowers stay on top of their loans when disaster strikes. But it can make your loan more expensive in the long run, especially if you apply for hardship forbearance or extend your repayment plan.

You can learn more about how it all works by reading our guide to student loans.

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