Federal Employees: How to manage your student loans during the government shutdown

Are you a federal employee impacted by the partial government shutdown? Here are some options to manage your student loans while you are furloughed or not receiving pay.

1. Postpone Your Payments through a Deferment or Forbearance

If you are a federal employee impacted by the partial government shutdown, you may temporarily postpone making your payments through the use of a deferment or forbearance. In particular, economic hardship deferments, unemployment deferments (if receiving unemployment benefits), a general forbearance, or a student loan debt burden forbearance may be available to you if you’re affected by the shutdown. You should understand, however, that interest generally continues to accrue on loans during deferment or forbearance. When the deferment or forbearance ends, interest will capitalize (compound) if left unpaid and will likely make your monthly payment go up when you restart your payments. You’ll also pay more over time as interest will now accrue on both your original principal balance and any capitalized interest.

5 Questions to Ask Yourself Before Postponing Your Federal Student Loan Payments

Working toward Public Service Loan Forgiveness (PSLF)?:

If you are working toward PSLF, periods of deferment or forbearance will not count toward the 120 payments needed to qualify for forgiveness under the PSLF program.

2. Enroll in or Update your Income-Driven Repayment Plan

Another option you have while you’re furloughed and not receiving pay is to enroll in an  income-driven repayment plan, which will set your payment according to your income. If you have little to no income, your payment under the income-driven repayment plans could be as low as $0 per month. If you’re working toward PSLF, even these $0 per month payments count toward the 120 payments needed to qualify for PSLF, assuming you meet all the other eligibility requirements.

If you are already in an income-driven repayment plan, you can visit StudentLoans.gov and complete an updated Income-Driven Repayment Plan Request to have your payment recalculated or you can contact your servicer and request to have your payment re-calculated immediately to account for your drop in income.

In either case, after the shutdown ends, you should notify your servicer that you are back to work, and that you are again able to resume making payments based on your restored income.

For information on the Public Service Loan Forgiveness Program, visit StudentAid.gov/publicservice.

Contact your loan servicer for more information, or to make any changes to your current repayment plan.