Your Injury Case

Postponing Student Loans After a Car Accident

The longer you live with an injury, the harder things can get. Especially when it comes to finances.

If you’ve found yourself out of work, unpaid, due to a car accident, bills will become an issue. While most people will not skip rent or a car payment, it’s harder to justify paying the pesky student loan when you can’t afford it. 

But, hold up! Missing payments can also hurt your credit and your chances of getting approved for loans later on. You can’t just skip paying them and do nothing. 

Don’t worry. There are options to help you through a serious injury, while staying current on your student loans.

Deferment or Forbearance

After an injury, it’s possible to postpone or delay payments on your student loan by entering into what is called forbearance or deferment.

Loan payments can be deferred for up to three years. Depending on what type of loan you have, you may not be responsible for the interest that accrues. People are qualified for a deferment if they are unemployed or facing economic hardship.

Using forbearance, you can postpone payments on federal student loans for up to 12 months if you are experiencing financial difficulties and need ways to pay high medical bills. In the case of forbearance, you will be responsible for any interest that accrues while you postpone payments. 

It’s easy to apply for forbearance or deferment on your student loans, simply visit the FSA. Many lenders also offer similar deferment and forbearance options. 

An IDR Plan

If you’re injured in a car accident and your income has decreased, you might be eligible for an income-driven repayment plan (IDR). There are four different types:

  • Income-based repayment
  • Income-contingent repayment
  • Pay as you earn
  • Revised pay as you earn

Although all of these differ slightly, the main idea is that the government extends your repayment term and caps the monthly payment at a percentage of your income. After 20-25 years of repayment, your remaining debt will be forgiven. 

An IDR is ideal because you can stay current on your loans, while paying considerably less each month. You may even qualify for a payment as low as 0$. Just keep in mind that by extending the terms, you will be paying more interest over time.

Interest-Only Payments

If you have a private loan, an income-driven plan is not an option, but some services offer alternative programs with interest-only payments. In this case, you only make payments on the accrued interest each month, which can dramatically reduce monthly payments. 

Even though not all lenders offer this option, it’s worth contacting them about. Make sure you let them know you’ve been injured and are having trouble making payments. You’d be surprised at how many people are willing to work with you.

Total Disability Discharge

If you are permanently disabled in a car accident, you may be eligible for the Total Disability Discharge program. With this option, the government completely forgives your loan and you may never have to make payments again. 

You will, however, be expected to pay taxes on the forgiven amount. This can be a significant burden on someone who’s already out of work. 

To apply, you must submit a certification from your physician that states you are totally and permanently disabled. They must also state you are unable to work due to health issues. 

Unfortunately, if you have private loans, you are ineligible for the Total Disability Discharge. However, some private companies offer loan forgiveness in certain situations.  

If you have Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI), you can submit documentation of your Social Security benefits.

Managing Your Student Loans After an Accident

After you’ve been injured, it’s important to not let these things slide. Especially if you’re permanently disabled. The more delinquent a loan becomes, the more expensive it gets. The faster you act, the more money you will save overall.

Be proactive! Reach out to your lender and let them know what’s going on. The chances are people will be helpful and understanding. You simply have to make the first move. can help you recover your lost funds fast! Let’s see if you have a case.