The Impact of Natural Disasters on Student Loan Repayment
In the aftermath of a natural disaster, you may find that you have questions related to your federal student loans or financial aid, especially if you have trouble making a payment or need to transfer to another school. If you find yourself in this situation, knowing where to go for help can give you some peace of mind as you deal with other issues.
Disaster Help for Students Loan Borrowers in Repayment
If you have federal student loans and you are out of school and struggling to make payments because of a hurricane, flood or some other natural disaster, contact your federal student loan servicer right away. Student loan servicers handle the account management of your student loans, including billing and repayment, and are staffed with individuals who are familiar with the various repayment options and requirements.
[READ: Help for Hurricane-Affected Student Loan Borrowers.]
In a case where the event that you experienced was a federally declared natural disaster, your student loan servicer will have received special instructions from the U.S. Department of Education about how to assist you. The Federal Emergency Management Agency, known as FEMA, typically declares an event to be a major disaster when an affected state or local government requires federal assistance with long-term recovery.
If this type of declaration is made, you can request a disaster forbearance on federal student loan payments for a period of up to 90 days. If your account is placed in forbearance, interest will still accrue but you will either be able to make a reduced payment or no payments at all until the forbearance period expires. In the aftermath of an emergency, that could provide some much-needed temporary financial relief.
[READ: When Student Loan Forbearance Is a Good Idea.]
If you experience a federally declared natural disaster, you can also request a 15-day extension on the deadline for documentation that you need to provide related to your student loan. For example, this can apply to annual documentation of income for an income-driven repayment plan or TEACH Grant certification.
Even if the tragedy that you experienced was not declared a disaster by the federal government, your student loan servicer can still help you. The federal loan program offers several repayment plans available to all borrowers who are struggling to make a payment. Depending on your income and the situation, your payment could be reduced to as low as $0 per month during a time of need.
There are also other student loan forbearance and deferment options for which you may be eligible. Your student loan servicer can help you find the right choice that you are eligible for based on your situation.
Disaster Help for Current Students With Federal Loans
Current college students who experience a natural disaster are likely to have some added concerns about financial aid, especially those who will need to transfer schools or take some time away from school.
[READ: When It's OK to Stop Paying Student Loans.]
If you need to transfer schools, the first thing you should do is contact the financial aid office at your new school to request that your financial aid records be transferred. If your financial situation has changed, let your new school know this right away so that they can help adjust your financial aid award. You may be eligible for more federal loans or grants.
If you are a federal student loan borrower and you were not able to complete your school year as a result of a natural disaster, you may be eligible for an extended in-school status. This action will prevent you from entering repayment status on your loans or having to return the money that you borrowed for your disrupted semester. Contact your school's financial aid office to discuss options that may be available to you.
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