First Person: I Put Off Paying My Student Loans for a Year

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College can teach you a lot of things about managing your money, but they can’t keep you from accumulating debt! I have had to self-educate when it comes to student loans, but I am very glad I did. After a little research I was able to push back my loan payments for an additional year-interest free.

When I graduated from college, I did so with around $13,000 in student loans. I considered myself lucky, as many of my friends graduating from the same school had $100,000 in loans to deal with. I was also fortunate to only have to take out subsidized federal student loans. Subsidized loans don’t start charging interest until after you graduate. Unsubsidized loans would have started adding interest to your total from the moment you got the money. (For example, if you got an unsubsidized loan freshmen year, by senior year you had three years of interest tacked on!)

Like many college graduates I was unable to find work in my field. I decided to look for work of any kind and after months of applications I landed a job. The job had nothing to do with my education, it only required a high school diploma so you can imagine the pay was horrible. I was making around $1,000 monthly. I wanted to start paying my loans despite the fact that I could file for deferment; However, I practiced trying to put away the $200 a month for my payments and it was impossible. The only things I spent money on were gas and groceries, neither of which were of the best quality. Still, I could not set aside a fifth of my pay for loans.

So what did I do to get out of my payments? I didn’t ignore the calls and bills. I didn’t get money from friends or family. I didn’t take out a loan from somewhere else to make payments. (Although, all of these things do go through your head!)

I was a single person making less than $1,300 a month — this is 150% of the poverty guideline in the U.S. as defined by deferral request paperwork. This meant I could file through the government for an “economic hardship” deferment. I had to fill out an application and send it with copies of my check stubs to show one month’s pay. I applied for deferral a month before my payments and I was denied. The paperwork said you can not request deferment until your ‘repayment period’ has begun. I reapplied the first day of my payment cycle. It took a month for my request to be accepted. I received a letter in the mail to let me know what my current loan balances were and when my deferral would run out (after one year). I did have to make one payment because of the amount of time it took for the deferral to clear. You are responsible for payments up until your deferral is accepted.

I will have to file for deferral again this year-as you must reapply annually. Because I have decided to pursue a graduate school program and had to leave work, I am sure I will not be working at the time I reapply. In that case I will try to apply for unemployment deferral. The limit on deferrals is three years. My plan is to defer this one more year and then attend graduate school, after which I should be able to pay everyone in a timely manner.

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