October 4, 2007 :: Student Loan Borrowers Have Options During Financial Crisis
The Mortgage Bankers Association of America recently announced that up to 2 million adjustable rate mortgages will reset to higher interest rates this year, making monthly payments unaffordable for many homeowners. Affected Oklahomans may find themselves struggling to balance expenses and forced to choose between making their monthly mortgage payment and payments on other debt, including student loans.
According to the Oklahoma Guaranteed Student Loan Program (OGSLP), a division of the Oklahoma State Regents for Higher Education, options are available to ease the burden for federal student loan borrowers facing financial constraints.
Lenders participating in the Federal Family Education Loan Program offer a variety of repayment options to accommodate unexpected changes in financial situations. But, these benefits aren’t automatic, and borrowers must request them.
For example, borrowers who need time to adjust household budgets for higher mortgage payments may be eligible for forbearance, which temporarily suspends required monthly payments on federal student loans and may save a borrower from delinquency and potential default. If borrowers need payment flexibility for a longer period of time due to ongoing economic hardship, unemployment or other unforeseen circumstances, they should contact their lender to discuss deferment options or a modified repayment schedule to keep accounts current.
“The last thing a borrower needs during a financial crisis is the added pressure of late or missed student loan payments,” said Wayne Sparks, OGSLP early assistance manager. “That’s why we encourage borrowers to communicate openly and often with their lenders, especially when their financial situations change.”
To learn more about flexible repayment options and eligibility requirements, student loan borrowers must contact their lenders. Borrowers who aren’t sure where to start or have other questions about student loans can contact OGSLP’s early assistance department at (800) 358-5460 or firstname.lastname@example.org.
The Oklahoma Guaranteed Student Loan Program (OGSLP) is a guarantor for the Federal Family Education Loan Program and serves as the primary guarantor for Oklahoma students and post-secondary institutions, insuring lenders against default, bankruptcy, disability or death of student loan borrowers.