Can I Get New Loans When I Go Back To School?
So long as you are not in default on an existing federal student loan and have not borrowed the lifetime maximum amount, you can get new federal loans when you go back to school.
Private student loans are subject to each bank’s underwriting standards, so your ability to get a new loan will be based on your income, credit score, and other factors.
Do I Need To Keep Paying My Loans While I’m In School?
You can apply for a deferment of your federal student loans when you are enrolled at least half-time in a college or career school, as well as during periods of study in an approved graduate fellowship program or in an approved rehabilitation program for the disabled.
You do not need to make payments during the deferment period. In addition, the government may pay the interest on your Federal Perkins Loan, Direct Subsidized Loan, and Subsidized Federal Stafford Loan while your loans are deferred.
Private student loan deferments are granted or denied by the individual lending institution. You may or may not be granted a deferment, depending on the bank’s policies.
Do I Qualify For Federal Loans If I’m Behind On My Existing Loans?
You will qualify for new federal student loans if you’re behind on your existing loans and have not received the lifetime maximum loan amount.
Will An In-School Deferment Harm My Federal Student Loan Forgiveness Eligibility?
For any income-driven repayment plan, periods of economic hardship deferment and periods of repayment under certain other repayment plans will count toward your total repayment period. Therefore, your deferment period will not delay any forgiveness under these programs. You must make qualifying monthly payments in order to qualify for Public Service Loan Forgiveness. You cannot make qualifying payments while in deferment, so the deferment period will delay your forgiveness under this program.
Should I Borrow From My Retirement Funds For My Education?
Borrowing from your retirement for your education is a difficult question that requires an analysis of your financial situation, how long you have left before retirement, and your likely increase in income once you’ve completed your education.
Before making a decision, consider that you will need to repay the retirement loan or may be subject to severe early withdrawal penalties and taxes. In addition, by foregoing a student loan in favor of a retirement plan loan you will forfeit potential tax benefits associated with the deductibility of student loan interest.