Top 7 Common Mistakes to Avoid When Extending Your Student Loan

Key Takeaways

• Verify extension eligibility for each specific loan in your portfolio before applying
• Submit recent income documentation proving current economic hardship
• Recertify income annually on deadline to avoid repayment term resets
• Respond urgently to all written and digital lender communications
• Make all new minimum monthly payments on time without fail
• File co-signer release forms if parents or guardians signed your loans
• Pursue longer term extensions like 20-25 year income-driven repayment plans over shorter options

Extending your student loan repayment term can provide temporary financial relief. But navigating repayment extensions involves following rigid requirements and managing complex rules. Missteps lead to denied applications, loan defaults, and unnecessary charges. Avoid good faith mistakes that ultimately cause harm with these lookouts for the most common errors student borrowers commit when seeking extra time to pay loans. Read Along to find out how to find common mistakes to avoid when extending your student loan.

Struggling to Verify Eligibility

Confirming eligibility poses initial difficulty. Borrowers assume all student loans automatically qualify for popular federal programs that postpone payments. This perspective ignores limitations of private, state-based, and college-backed loans. Each lending institution and loan type carry distinct criteria for gaining an extension (Forbes, 2023). Blindly presuming you meet standards for deferment, forbearance, and income-driven arrangements wastes efforts and delays resolutions. Contact servicers directly to understand rights available to your exact loans before completing application paperwork. Submitting doomed applications not only denies immediate payment relief but also guarantees extra interest charges over a loan’s life.

Disregarding Your Documentation Burden

Loan servicers cannot legally accept an extension request without current income verification documents. Qualifying for plans because of financial hardship requires tangible proof sent alongside applications. Forgetting to collate, copy, and forward evidence demonstrating legitimate need guarantees denial (U.S. News, 2023). Unfortunately, sending outdated pay statements or incomplete W2s also earns quick rejection. Scrambling to gather paperwork burns precious time awaiting approval as interest costs compile. Gather and submit recent pay stubs, bank statements, tax returns, and employer notices that substantiate claims. Make documenting and mailing economic challenges loan extension priority number one.

Forgetting to Recertify Annually

After securing repayment relief, the privileges do not last permanently in most cases. Borrowers who gain entry into income-driven plans allowing smaller payments inevitably reach recertification deadlines a year later (Federal Student Aid, 2023). Failing to supply updated income documents on schedule kicks you off the program immediately as lenders reset expectations to higher non-discounted installments. Missed recertification dates create payment shock, unlike the financial shelter initially established. Avoid this fate by posting annual due dates clearly in your calendar and setting email alerts to prompt reverification submissions well ahead of cutoff dates.

Overlooking Serious Lender Notices

Student loan related mail deserves your prompt attention regardless of sending format. Physical letters and online inbox messages often include time sensitive warnings about expiring deferment or request additional information still needed from you before processing a forbearance request (Nerdwallet, 2023). These updates may announce final opportunities before adverse actions take effect against you. Failing to closely track inbox alerts and openings posted envelopes leads borrowers to wrongly assume all goes smoothly while extension rights slip away quietly in the background. Robustly monitor and quickly respond to any lender initiated attempts to communicate for your own protection.

Stumbling With Minimum Repayments

A common misperception assumes approved extensions release responsibility to send regular monthly payments. However, most plans from deferment options to graduated arrangements only alter minimum due amounts rather than erasing obligations completely ( credible, 2023). Review adjusted installment expectations carefully detailed in approval letters. Commit to sending improved sums before deadlines without fail through automatic bank withdrawals if necessary. Sporadic and unreliable payments cast doubt on real economic hardships claimed to justify extension allowances in the first place. Persistent issues risk cancellations and subsequent loan default.

Ignoring Cosigner Release Needs

Parent PLUS loans and certain private loans lean on cosigner guarantees when borrowers fail to pay. Education debt with a mom, dad, grandparent, guardian, or family friend’s name attached as co-responsible party cannot ethically seek extensions like deferments and forbearances without their express consent. Doing so burdens financially vulnerable cosigners with liability for installments you cannot afford (ProEducation Lending, 2023). Receive written cosigner release or partial discharge of their obligations from lenders first before pursuing postponed payment options that push overdue account balances into the future. At minimum, select shorter extensions to minimize unfair demands imposed against kind hearted cosigners.

Depending Too Heavily on Short-Term Relief

Lengthy loan terms make income-based repayment the most logical path for flexible options when compared against brief 60 to 180 day deferments or 1 year forbearances (Federal Student Aid, 2023). Recent medical school graduates facing 8 years of expensive education debt realistically need plans lasting 20 to 25 years to accommodate projected earnings and long residencies at low initial compensation. However, asking loan servicers repeatedly for back to back short extensions rather than committing to 2 decades of regulated income-aligned installments works against the ultimate goal to pay loans in full. Give yourself financial breathing room for the long haul through long-term arrangements.

Key Takeaways

Avoiding common student loan extension mistakes keeps your education debt in good standing:

• Verify each loan type meets eligibility rules before applying
• Submit recent pay statements and tax documents that satisfy hardship documentation requirements
• Annual income recertification sustains ongoing extension benefits
• Closely monitor physical and digital correspondence from lenders
• Make all adjusted monthly payments reliably and on schedule
• Release cosigners from liability before postponing installments
• Choose lengthier income-driven plans over short-term options

Gaining temporary relief from relentless student loan payments provides mental health benefits and financial flexibility when done properly. Sidestep unnecessary struggles by understanding and avoiding frequent student borrower pitfalls that sabotage extension goals. Arm yourself with information above as guidance to sustain your loan repayment postponement privileges without issue.