This is a tip that will save you months of frustration. When it is time to fill out a deferment, forbearance, or Income Driven payment plan application, take your time and read! The main reason I ever see someone get denied for these applications are because they filled in the wrong thing or skipped sections which made it impossible the process. Worst part? If you get denied you can’t just fix that part, you have to fill out a new application and wait additional processing time.
Here are some of the most common mistakes made (though the list is very far from inclusive):
1. Unemployment Deferment: Section 2 number 1 has two blanks. The first box asks what date you become unemployed the second box is asking the date you would like the deferment started. If you were recently unemployed box number two does not have to be filled out as they will use box 1 date. However this deferment only goes 6 months and if you are on month 8 and leave the second box empty, putting the deferment on for 6 months from that date will not bring your account up to date and will hurt your situation. Also remember these backdate to the date you become unemployed, so if you became unemployed two months ago but want the deferment to start now, use the second box
2. Economic Hardship Deferment: Section 2 by the black dot. This box never gets filled in it seems as people go straight to the numbers. If you don’t put a start date as asked for, your request will be denied. On this form, also be sure to check under which criteria you qualify and supply the appropriate proof as asked for beside the box.
This brings me to another part of this advice. Read what is needed to complete the form. You will need things like pay stubs or tax returns for some, proof of benefits for others. For the Teacher Loan Forgiveness you have to send in certifications and documentation from certified officials. Every form is different, but all forms tell you what you need. By reading the form you will be able to avoid the frustration of a denial by omission.
3. IBR/Pay As You Earn/ICR application. The biggest mistake here besides leaving out the proof of income is including spouse information (in section 3 or the question at the end asking if they have taxable income) but not having their signature. This application is only two pages but asks a lot of questions. Read it carefully. In addition, be sure to pick your payment plan since there are three choices or choose to have your servicer choose for you. Leaving it blank will be the approval kiss of death though.
While these are only three examples, it illustrates the larger point. People are busy, they think they know what the form says and they rush through it. Then you have to wait a month (by the time the mail comes) to find out you are denied and use more forbearance time to fill out a new form. Using diligence is important. Also if you ever have questions, call in to your servicer, we always do love to help and will walk through a form with you.
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