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Student loans can be an important issue for individuals looking to go on mission. In this article, we will
guide you through the student loan system so that you have the tools available to consider your options.
Options for Loan Management:
There are two primary ways that volunteers are able to postpone payments during their time with Fidesco USA: Deferment and Forbearance.
DEFERMENT: A temporary suspension of loan payments for specific situations such as re-enrollment in school,
unemployment, or economic hardship.
- Different loan holders offer different types of deferment options, so it is best to check with your individual loan holder.
- Most Fidesco applicants will fall under the “economic hardship” condition, which requires meeting certain eligibility criteria.
- Federal loan deferments are available up to 36 months, usually granted in 6 to 12-month increments.
FORBEARANCE: A temporary postponement or reduction of payments for a period of time due to financial difficulty.
- Forbearance is generally used when borrowers experience temporary financial difficulty and postponement allows them time to catch up to their payment schedule, or when they have exhausted their deferment options.
- Forbearance may reduce payments, extend the billing period, or postpone them for a short-term period altogether.
- For federal loans, there are no limits on forbearance requests, and they are granted up to 12 months at a time.
- Steps for Fidesco USA Volunteers:
Here are some general steps for Fidesco USA volunteers who are interested in temporarily postponing loan payment:
- Get in touch with the financial aid office at your college or university. If the office provided help with setting up your loans initially, they can probably give advice on deferment and forbearance options.
- Call your loan holder(s) to check your loan status. Inform them of your intention to volunteer, and review their options.- Note: Volunteers with federal and state-backed loans have various options for deferment and forbearance. For those with private loans, the options are limited to what their private lenders may offer.
- Submit a deferment or forbearance request.
Request for forbearances and deferments should be submitted to the loan holder or servicing agency within 30 days from the mission start date.
- In submitting a request for deferment or forbearance, a letter can be submitted on behalf of Fidesco USA, verifying that you will be serving with the Fidesco program and specifying the amount received as a stipend.
Documents:
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