Borrowers who are having difficulty working out a payment plan with their lender or feel they were misinformed can file a complaint with the Consumer Financial Protection Bureau at http://www.consumerfinance.gov/complaint/ or by calling (855) 411-2372. The agency will then contact the lender on behalf of the borrower.
"Many people have been able to get errors corrected or information about repayment options," said Rohit Chopra, student loan ombudsman at the CFPB.
With federal student loans, borrowers who are unemployed or suffering economic hardship can opt to defer payments. Economic hardship deferments are granted one year at a time, while unemployment deferments are granted in six-month increments.
This is by no means a giveaway, since interest charges keep piling up during deferment. But it provides temporary relief to students in real need without destroying their credit profiles.
Another important safeguard with federal loans is that borrowers can apply for a program called Income-Based Repayment, which caps monthly payments at 15 percent of annual income above $16,300. Those who earn less don't have to make any payments; any remaining debt after 25 years is forgiven, or 10 years for those entering public service jobs.
Eligibility for the program is determined by weighing the amount owed against income.
There's no similar program with private student loans. But for those struggling to make ends meet, the lender may in rare cases reduce the interest rate or minimum payment amount to make the monthly payment more manageable.
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