How to sign up for income-driven repayments, defer your loans, apply for forgiveness and more.
Student loans — especially federal student loans — can be a lot more flexible than average personal loans. If you’re facing financial hardship, federal loans allow you to put your repayments on hold, essentially pausing your loan until you’re back on solid footing. You can also structure repayment plans based on how much you earn, and interest you pay on these loans are typically tax-deductible.
You’ll have to do some leg work to get these perks — like collecting and filling out paperwork. Our series of guides to filling out student loan forms walks you through how each form works and lets you know what you need to do before and after turning them in.
How to fill out the Free Application for Federal Student Aid (FAFSA)
- Who it’s for: All college, graduate or professional students in the US
- Eligible loans: Federal loans (some private student loans require you to submit the FAFSA before applying)
- When to fill it out: After October 1 of the year before you need federal aid (after October 1, 2017 for the 2018-2019 academic year)
If you’re applying for any type of student loan, chances are you’ll need to fill out the FAFSA. This form determines if you’re eligible for federal loans or other types of aid like federal grants and work-study — which you don’t need to pay back.
Even if you doubt you’ll get much from the government, most legitimate private lenders recommend that borrowers apply for federal aid first, before taking out a private loan. Some even require it.
The reason is that federal student loans come with more flexibility than private student loans. They typically come with lower interest rates, offer several different types of repayment plans and more opportunities to qualify for forgiveness. Not all students can get federal aid, but at least start the application if you aren’t sure. You could end up with a smaller student debt load.
How to fill out the Income-Driven Repayment (IDR) Plan form
- Who it’s for: Low-income borrowers; anyone planning on applying for public service forgiveness
- Eligible loans: Federal loans
- When to fill it out: While your loans are in repayment
Federal loans come with several different repayment plans based on your income. Each month you’ll typically pay between 10% and 15% of your income after taxes for 20 to 25 years. The government forgives any remaining debt after the repayment period.
If you’re in a low-paying industry, IDR plans are designed to help you avoid defaulting on your student loans. Some even require you to keep a low income to remain eligible. If you’re thinking of applying for forgiveness after working for the government or a nonprofit for 10 years, the Department of Education recommends that you repay your loans through an IDR plan.
How to fill out student loan deferment forms
- Who it’s for: Anyone who’s temporarily struggling to pay off their loans
- Eligible loans: Federal loans
- When to fill it out: As soon as you know you’ll need to defer your loans (after getting into graduate school or a call to active military duty, for example)
Student loan deferment is for when you temporarily can’t make your student loan repayments. Examples include going back to school, losing your job or getting deployed, among other things. Typically, you can qualify for six months to three years of deferment.
The Department of Education provides different forms for each situation. You may be required to submit a deferment form each year, even if you’re eligible for longer.
How to fill out the Public Service Loan Forgiveness (PSLF) form
- Who it’s for: Anyone who’s worked in public service for at least 10 years while paying off loans on an IDR plan
- Eligible loans: Federal Direct Loans
- When to fill it out: You can submit employer certification for each eligible employer at any time; submit your complete application after making 120 eligible repayments
PSLF is the government’s only total loan forgiveness program. If you’ve worked for an eligible government or nonprofit employer for 10 years (they don’t need to be consecutive) while making income-driven repayments, then you can apply to have your remaining student debt canceled. The government recommends you send in an employer certification form each time you leave an eligible job, though you also have the option of doing it all at once.
This program was created in 2007 to provide an economic incentive for highly educated students to take low-paying public service jobs. It costs a lot of taxpayer dollars, however, and there have been proposals to limit how much debt you can have forgiven or even canceling it altogether. For now, it’s still up and running.
How to write off your student loan interest repayments
- Who it’s for: Anyone who has student debt, makes less than $80,000 a year before taxes and files a joint tax return if married
- Eligible loans: Federal and private student loans
- When to fill it out: By the federal deadline to file tax returns
If you pay more than $600 in interest on your student loans each year, you might be able to deduct up to $2,500 from your federal income taxes. You’ll have to be eligible, however. First, you can’t make more than $80,000 a year (or have a household income of more than $160,000 if you’re married). And you can’t cheat that income requirement by filing separate taxes if you’re married. You also can’t be claimed as a dependent on anyone’s taxes.
Writing off your interest payments is a bit more complicated than you think, though you won’t have to crunch any numbers if you use a tax filing software like Turbotax or a CPA. You also aren’t required to submit any forms, though you will need to get a 1098-E from your servicer.
Need funds for school or interested in refinancing? Compare your options
Student loans might come with more leeway when it comes to paying them off, but you’ll have to fill out some forms to take advantage of all the perks you’re eligible for. To learn more about how student loans work and your options, check out our guide to student loans.