Making Student Loan Payments After Losing Job

What are my options to make student loan payments after losing my job?

Q: Dear Mr. Van Horn, I hope that you can help me with some good advice. I graduated from college two years ago with about $22,000 in student loans. I took a job with the company thinking that it was on sound financial footing, but after a string of incidents it has become apparent that it is not. We were told this weekend that the company would be laying off a significant percentage of the workforce. I’ve been very thrifty so that I could pay as much as possible on my loans – living with roommates, being really budget conscious – but this throws everything right back to square one. My parents told me I could move back in with them, but that doesn’t do anything about my loans. I’m losing sleep over this. Help?


A: I’m very sorry about you losing your job. Even in a period of general recovery, people still run into these kinds of hardships. You don’t say if you have anything in savings, but I am glad that your parents are willing to let you fly back to the nest. As for your student loans, do not just stop paying them and let them go into default. There are several approaches that you can take.


Student Loan Payments: Deferment or Forbearance 

You can apply for a deferment or forbearance. A deferment allows you to postpone repayment of principal and interest for a short period, and depending on what type of loan you have your interest may be covered by the federal government. You can also request a deferment if you return to school for at least part time.


If you can’t obtain a deferment, you may be able to obtain a forbearance. Forbearance means that you would be able to stop paying or reduce your payment for up to one year, however, interest would continue to accrue on your balance. You may request a forbearance for financial hardship, and after providing proof, your servicer will decide whether or not to grant the forbearance. However, there are also mandatory forbearances, which includes a provision for people who are paying 20 percent or more of their monthly gross income.


Take a Different Path

There are loan forgiveness programs for teachers and public service workers. If this is not your chosen career path, it could at least make something of a detour. Under the federal Teacher Loan Forgiveness Program, you would need to teach full-time for five consecutive academic years, and meet additional conditions; you could lose over $17,000 of that loan balance.

Under the Public Service Loan Forgiveness Program, you would need to work for:


I wish you all the luck in the world, and I know it can be unsettling. If you feel you need a little more information and advice than I can give in this limited medium, I urge you to make an appointment for a free consultation. We are open seven days a week and have offices in Fort Lauderdale and West Palm Beach. Give us a call, and let’s get you back to sleeping at night.

About Chad Van Horn

Chad T. Van Horn, Esq. is a South Florida business leader and founding partner attorney of Van Horn Law Group, P.A. Through a combination of dedicated philanthropy, spirited entrepreneurship and legal expertise, he applies his resources and network to helping people. Learn more about Chad Van Horn

Published by
Chad Van Horn

Recent Posts

Florida Private Student Loan Statute of Limitations

In the state of Florida, the private student loan statute of limitations is typically five years. Read More

6 days ago

How Should You Answer a Debt Collection Lawsuit?

Best practices for immediately after you are served with a debt collection lawsuit. Read More

2 weeks ago

Benefits of Chapter 13 Bankruptcy vs. Debt Consolidation 

When weighing two vastly different approaches like chapter 13 bankruptcy vs. debt consolidation, staying focused on your individual goals is… Read More

3 weeks ago

Ten Things to Do When Overwhelmed by Debt Anxiety

What Does Being Overwhelmed by Debt Anxiety Look Like? Read More

4 weeks ago

The Good, Bad, and Ugly about DIY Bankruptcy Chapter 7

Judging from the popularity of the search term “DIY bankruptcy chapter 7” you would think that this legal procedure is… Read More

1 month ago

Free Credit Counseling to Pier 66 and Beachcomber Workers

Laid-off employees of Pier-66 and Beachcomber can get free credit counseling at Van Horn Law Group. Read More

1 month ago