Get Federal Loan Economic Hardship Request Form

1. What is an Economic Hardship Deferment Request?
   An Economic Hardship Deferment Request is a form used by borrowers with William D. Ford Federal Direct Loan (Direct Loan) Program, Federal Family Education Loan (FFEL) Program, or Federal Perkins Loan (Perkins Loan) Program to request a temporary suspension of payment due to economic hardship. This deferment is available for a maximum of 36 months per loan program.

2. Who is eligible for an Economic Hardship Deferment?
   To be eligible for this deferment, borrowers must demonstrate economic hardship through specific criteria, such as receiving federal or state public assistance, serving as a Peace Corps volunteer, working full-time with income not exceeding 150% of the poverty guideline for their family size and state, or having received this deferment for the same period on another federal student loan program.

3. What documentation is required to prove eligibility?
   Documentation varies based on the eligibility criterion met, including proof of income, documentation from public assistance programs, or certification of Peace Corps volunteer service. Borrowers must also provide documentation if they previously received the same deferment on a different federal student loan program for the same period.

4. How is family size determined for this deferment?
   Family size includes the borrower, their spouse, their dependent children (including unborn children expected to be born during the deferment period), and other individuals who live with and receive more than half their support from the borrower during the deferment period.

5. What happens if my income exceeds the threshold during the deferment period?
   If your income exceeds 150% of the poverty guideline for your family size and state at any point during the deferment, you are required to inform your loan holder immediately as your eligibility for economic hardship deferment may end.

6. Can interest accrue on my loans during this deferment?
   Yes, interest may continue to accrue on unsubsidized loans during the deferment period. However, Perkins Loans do not capitalize interest. Borrowers have the option to pay interest during deferment to prevent capitalization on other loan types.

7. What happens after the Economic Hardship Deferment ends?
   Once the deferment ends, borrowers are required to resume making regular payments according to their loan's terms. Perkins Loan borrowers receive a six-month post-deferment grace period during which payments are not required.

8. How do I submit my Economic Hardship Deferment Request?
   Borrowers must complete the form with accurate information, attach any required documentation, and return the completed form to their loan holder. If loans are held by different loan holders, separate deferment requests must be submitted to each holder.

Filling out the Federal Loan Economic Hardship Request form requires careful attention to detail. Common mistakes can delay or affect the deferment process. Here are ten errors to avoid:

1. Not updating personal information at the start of the form if there have been any changes. It's crucial to check the box if any information has changed to ensure the loan servicer has the most current details.
2. Selecting the incorrect type of documentation for monthly income. Borrowers must attach proof of their monthly income, choosing between gross taxable income from all sources or one-twelfth of the Adjusted Gross Income from their most recent federal income tax return.
3. Failing to accurately include all family members in the family size count. This total should encompass the borrower, their spouse, their dependent children, any unborn children expected during the deferment, and other dependents living in the household.
4. Misinterpreting the poverty guideline criteria relevant to the borrower’s family size and state of residence. This misunderstanding can lead to incorrectly assessing one’s eligibility for the deferment.
5. Omitting required documentation that confirms receipt of benefits from qualifying federal or state public assistance programs or verifying Peace Corps volunteer status, when applicable.
6. Incorrectly assessing one’s deferment eligibility based on full-time employment status without understanding that full-time is defined as working 30 or more hours per week in a position expected to last at least three consecutive months.
7. Forgetting to sign and date the borrower certifications and authorization section, which is essential for the form to be processed.
8. Overlooking the need to submit separate deferment requests for loans held by different loan servicers. Borrowers often do not realize that each servicer requires a unique submission.
9. Incorrectly filling out dates or using the wrong format, as the form specifies that dates should be in the month-day-year format.
10. Failing to include the borrower’s name and account number on all documents that are attached, making it difficult for servicers to match the documentation to the deferment request.

Each of these mistakes can significantly delay the deferment process or result in the denial of a request. It is essential for borrowers to read the form carefully, gather all necessary documentation before filling out the form, and review their submission for accuracy and completeness.

When requesting a Federal Loan Economic Hardship Deferment, it's vital to be aware of and prepared with several other forms and documents that can support your application. Below are four key documents typically used in conjunction with the Economic Hardship Request form:

• Income Tax Return Transcript: This document provides a detailed record of your prior year’s income as reported to the IRS. An essential piece for substantiating your financial status, it helps to affirm the income details provided on the Economic Hardship Request form.
• Proof of Benefits Statements: If you receive payments under federal or state public assistance programs, such as SNAP or SSI, providing official statements can serve as evidence for these benefits. These documents corroborate your need for economic hardship consideration.
• Pay Stubs: For applicants employed full-time, the most recent pay stubs can act as immediate proof of earnings. Submitting these allows for a straightforward comparison between current income levels and the financial thresholds set for deferment eligibility.
• Documentation of Unemployment Benefits: If your economic hardship is due to unemployment, official documentation or letters from the state unemployment office can serve as evidence. These documents typically outline the benefits period and amount, directly supporting your deferment request.

Collecting and presenting these documents accurately is crucial for a successful deferral request. The specific requirements and procedures can vary, so it's advisable to seek detailed guidance from the loan servicer or a financial advisor to ensure compliance and adequacy of your application materials.

The Federal Loan Unemployment Deferment Request form is similar to the Economic Hardship Request form as it also allows borrowers to postpone loan payments due to specific life circumstances, in this case, unemployment. Both forms require borrowers to demonstrate their current situation, such as unemployment status or economic hardship, and both offer temporary relief from loan payments.

The Income-Driven Repayment Plan Request form echoes the Economic Hardship Request form by taking the borrower's financial situation into account to adjust loan payment amounts. While the Economic Hardship Request form temporarily suspends payments, the Income-Driven Repayment Plan Request potentially lowers monthly payments based on the borrower's income and family size.

The Parent PLUS Borrower Deferment Request form relates closely to the Economic Hardship Request form by targeting a specific group undergoing financial difficulties. It specifically addresses parents who have taken out PLUS loans for their children's education and, similar to the Economic Hardship form, suspends loan payments during periods of unemployment or financial hardship.

The Total and Permanent Disability Discharge application shares a purpose with the Economic Hardship Request form by providing relief from federal loan obligations, but under much more severe circumstances. This form requires proof of a disability that prevents the borrower from engaging in gainful employment, leading to loan discharge rather than temporary deferment.

The Teacher Loan Forgiveness Application can be associated with the Economic Hardship Request form as it offers a form of financial relief for federal loan borrowers. This forgiveness is granted to teachers who have worked for five complete and consecutive academic years in certain elementary and secondary schools serving low-income families, reducing or eradicating their loan balance.

The Public Service Loan Forgiveness (PSLF) Application also provides long-term financial relief from student loans, akin to the temporary assistance offered by the Economic Hardship Request form. Through the PSLF program, borrowers working in public service may have their remaining loan balance forgiven after making 120 qualifying payments, acknowledging their contribution to society.

The Loan Consolidation Application bears similarity to the Economic Hardship Request by offering a solution to manage federal student loan debt. It allows borrowers to combine multiple federal education loans into one, potentially lowering monthly payments or extending the repayment period, which can indirectly relieve financial pressure.

The Forbearance Request form, often used in situations not covered by deferment options like the Economic Hardship Request, permits the temporary suspension or reduction of payments. It provides a short-term solution during financial difficulties, though interest continues to accrue, affecting the total loan cost.

The Closed School Discharge Application provides relief by discharging loans for borrowers unable to complete their program due to a school's closure. This form, while circumstance-specific, similarly alleviates the financial burden on students, much like the Economic Hardship Deferment does in times of financial struggle.

The Borrower's Defense to Repayment Application offers a way for borrowers to seek loan forgiveness if their school misled them or engaged in other misconduct in violation of certain laws. This form, paralleling the Economic Hardship Request’s aim to alleviate undue financial stress, addresses the financial ramifications of academic institutions' actions against the borrower's interests.

Filling out the Federal Loan Economic Hardship Request form is a critical step for those experiencing financial difficulty and looking for relief on federal student loan payments. It's essential to approach this process methodically to ensure eligibility for deferment. Here are four things you should do and four things you shouldn't do when completing the form:

• Read instructions carefully: Ensure that you fully understand the requirements and instructions before starting to fill out the form. This minimizes errors and improves the likelihood of your request being processed smoothly.
• Provide accurate information: All personal details, financial information, and supporting documentation must be accurate and truthful. Misrepresentation can lead to severe consequences, including fines or imprisonment.
• Attach required documentation: Various sections of the form require documentation (e.g., proof of monthly income, documentation of deferment on other loans). Ensure these documents are attached and clearly legible to support your deferment request.
• Notify of changes: If your situation changes during the deferment period (e.g., an improvement in financial circumstances), promptly notify your loan holder to ensure compliance and avoid any issues.

• Leave sections incomplete: Failing to fill out all required sections can result in processing delays or denial of your deferment request. If a section doesn't apply, note it accordingly.
• Guess on figures or facts: Estimating income or not being specific about your financial hardship can impact the assessment of your request. Use actual figures and provide a clear explanation of your economic situation.
• Use outdated information: The poverty guidelines and eligibility criteria can change. Ensure you're using the most current version of the form and guidelines, which can typically be found on the official website of the Federal Student Aid.
• Forget to sign and date the form: An unsigned form is incomplete, and your request cannot be processed until it's signed. Double-check that you've also dated the form when signing.

There are several misconceptions about the Federal Loan Economic Hardship Deferment Request form that many borrowers have. Understanding these misconceptions can help borrowers make informed decisions regarding their federal student loans during times of financial difficulty.

• Misconception 1: You cannot apply if you're employed. Actually, employment does not automatically disqualify you. Eligibility depends on your income relative to your family size and poverty guidelines.
• Misconception 2: It automatically forgives your student loans. This is incorrect. The deferment merely postpones your payments during times of economic hardship. You're still responsible for repaying the loan balance afterward.
• Misconception 3: Interest will not accrue on any loans during deferment. Subsidized loans do not accrue interest during deferment, but unsubsidized loans will continue to accumulate interest.
• Misconception 4: It's a lengthy and complicated process. While the form requires specific information and documentation, following the provided instructions carefully can simplify the process.
• Misconception 5: You need to submit separate forms for each loan. If your loans are with the same loan servicer, you can request a deferment for all of them with a single form.
• Misconception 6: There's no limit to how long you can defer payments. There is a maximum cumulative eligibility of 36 months per loan program for economic hardship deferments.
• Misconception 7: Approval is guaranteed. Approval depends on meeting specific eligibility criteria related to your income, family size, and employment status.
• Misconception 8: All federal student loans qualify. Only loans under the Direct Loan, FFEL, and Perkins Loan Programs are eligible for economic hardship deferment.

It's crucial for borrowers to carefully read the form and instructions, understand the eligibility requirements, and consider how a deferment fits into their overall financial plan for repaying student loans.

Filling out the Federal Loan Economic Hardship Request form is an important step if you're facing financial difficulties. Here are some key takeaways to keep in mind:

• Provide accurate and complete borrower information in Section 1, including any changes to your contact details.
• Understand the criteria for deferment eligibility detailed in Section 2, which includes receiving assistance from federal or state programs, serving as a Peace Corps volunteer, working full-time, and having an income below a certain threshold related to your family size and state.
• Documentation is crucial; you must attach proof of your monthly income (either gross taxable income or adjusted gross income from your tax return) and, if applicable, evidence of receiving public assistance or being a Peace Corps volunteer.
• The form allows for a maximum cumulative deferment of 36 months per loan program. However, it’s encouraged to consider an income-driven repayment plan as an alternative.
• Complete understanding and correct certification in Section 3 are essential. By signing the form, you are certifying that all the information provided is true and that you agree to inform your loan holder if your deferment eligibility changes.
• Detailed instructions in Section 4 guide you through filling out the form, including how to submit the form and any required supporting documentation.
• The form warns against making false statements, reminding you that penalties may include fines, imprisonment, or both.
• Your submission is not only about requesting a deferment. It also involves authorizing your loan holder to contact you regarding your loans using automated systems for voice or text messages.

It's imperative to return the completed form and any necessary documentation to the address provided in Section 6 or to your specific loan holder. If you need assistance, contact details are provided in the form.