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Applying for Student Loan Unemployment Deferment

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Our goal is to give you the tools and confidence you need to improve your finances. Although we receive compensation from our partner lenders, whom we will always identify, all opinions are our own. Credible Operations, Inc. NMLS # 1681276, is referred to here as “Credible.”

If you’re unemployed, keeping up with your student loans might seem impossible. However, depending on what type of student loans you have, you might qualify for unemployment deferment. This will temporarily pause your student loan payments, giving you time to job hunt.

Here’s what you should know about unemployment deferment:

What is unemployment deferment?

Unemployment deferment is a way to temporarily pause your student loan payments if you’ve lost your job. Here’s how it works for federal and private student loans:

  • Federal student loans: You can apply for unemployment deferment for federal student loans for up to three years. You’ll need to show that you’re eligible to receive unemployment benefits and are unable to find full-time work.
  • Private student loans: Any type of deferment — including unemployment deferment — for private student loans is provided at the discretion of the lender. You’ll need to check with your lender to see what options are available to you.

Keep in mind that interest might stop accruing a deferment period, depending on the type of loan you have. This is different from forbearance, where interest typically continues to accrue while you’re not making payments.

Coronavirus and student loans: Because of the COVID-19 pandemic, student loan payments, interest, and collections have been paused by the CARES Act through Jan. 31, 2021.

While there might be new government action to extend these coronavirus-related benefits, you should plan to resume regular student loan payments later in 2021 unless you’ve been approved for further deferment or forbearance options.

Learn More: What Is Student Loan Deferment?

Applying for federal student loan unemployment deferment

If you have federal student loans, you can apply for unemployment deferment through your loan servicer. An application for unemployment deferment is also available from the Department of Education, but it’s a good idea to contact your servicer to see if any other forms are also required.

You’ll also need to submit documentation that shows your eligibility for unemployment benefits as well as your job search history.

Tip: Until you’ve received confirmation from your loan servicer that your deferment has started, continue making payments as scheduled so you don’t accidentally miss any payments and end up in student loan default.

Applying for private student loan unemployment deferment

If you have private student loans, you’ll need to check with your lender to see if they offer any deferment and forbearance options. If they do, your lender can also walk you through the steps to apply.

Keep in mind: Not all lenders offer deferment as an option if you’ve lost your job. Some might allow you to place your loans in forbearance, though.

For example, Sallie Mae doesn’t provide unemployment deferment, but you can request a temporary forbearance in cases of economic hardship by calling their customer service team.

  • Advantage: You can apply for forbearance by contacting the Kentucky Higher Education Student Loan Corporation (KHESLC) at 800-693-8220.
  • Ascent: You can request a temporary hardship forbearance through Launch Servicing by completing and signing an application. Contact Launch Servicing at 877-354-2629 for more information.
  • Brazos: Contact your loan servicer to find out about hardship forbearance options. Brazos works with several servicers. Find the website and phone number for yours here.
  • Citizens Bank: If you’re having trouble making payments on your Citizens Bank loan, contact Firstmark Services at 855-819-7137 to see if you qualify for deferment or forbearance.
  • College Ave: You can request forbearance by calling College Ave at 844-803-0736.
  • EDvestinU: Contact EDvestinU at 855-887-5430 to see if you qualify for deferment or forbearance.
  • INvestEd: Contact American Education Services (AES) at 800-233-0557 to discuss deferment or forbearance options.
  • MEFA: MEFA offers forbearance during economic hardship. Contact AES at 800-233-0557 to see what options are available to you.
  • PenFed: If you have PenFed loans, head to PenFed’s online financial hardship center to apply for a temporary or permanent hardship, depending on how long you expect the situation to last. PenFed offers both deferment and forbearance options.
  • RISLA: You can apply for forbearance on your RISLA loans by mail, fax, or uploading your documents online. You can find the application here.
  • Sallie Mae: You can temporarily pause your Sallie Mae payments through forbearance. Contact them at 800-472-5543 to get started.
  • SoFi: SoFi offers an Unemployment Protection Program that suspends payments for up to 12 months in three-month increments. Contact SoFi at 855-456-7634 for more information.

Check Out: Private Student Loan Consolidation

How long does deferment last?

If you’ve had your loans deferred, here’s a rough idea of how long your benefits might last:

  • Federal student loans: Deferment periods for federal student loans generally last six to 12 months, depending on the type of loans you have. You might be able to take advantage of unemployment deferment for federal student loans for up to a maximum of three years. You’ll need to show that you’re able to receive unemployment benefits and that you’re looking for full-time work to remain eligible.
  • Private student loans: With private student loans, the length of deferment is at the discretion of your lender. If you need more time, you’ll need to contact your lender to see if you’re eligible.

Alternatives to unemployment deferment

If you don’t qualify for unemployment deferment, there are other options available that could help you manage your student loans while you’re looking for work. Here are several alternatives for student loan repayment help to consider:

  • Income-driven repayment (IDR) plans: If you have federal student loans, you can sign up for an IDR plan. These plans base your payments on your income as well as extend your repayment period. Depending on the plan you choose, you could have any remaining balance forgiven after 20 to 25 years of on-time payments. There are four IDR plans to choose from: Income-Based Repayment (IBR), Pay As You Earn (PAYE), Revised Pay As You Earn (REPAYE), and Income-Contingent Repayment (ICR).
  • Apply for forbearance: Forbearance is another potential way to temporarily postpone your payments. You’ll need to contact your servicer or lender to see if it might be available for you. Keep in mind that interest might continue to accrue while your loans are in forbearance.
  • Contact your lender: Even if you don’t think you’ll qualify for unemployment deferment, it’s a good idea to contact your lender if you’re having trouble making payments. You might be surprised to find more options are available to you.
  • Try refinancing: Once you’ve found your next job, you might want to consider refinancing your student loans. Through refinancing, you could qualify for a lower interest rate and reduce your overall loan costs. Or you could extend your repayment term to get a lower monthly payment, which could help you catch up on your other bills. While you’ll generally need good to excellent credit to qualify for refinancing, some lenders also offer options for refinancing with bad credit.
Keep in mind: If you refinance federal student loans, you’ll lose your federal benefits and protections, including access to IDR plans and student loan forgiveness programs.

If you decide to refinance your student loans, be sure to consider as many lenders as possible to find the right loan for you. Credible makes this easy — you can compare your prequalified rates from multiple lenders in two minutes.

Find out if refinancing is right for you

  • Compare actual rates, not ballpark estimates – Unlock rates from multiple lenders in about 2 minutes
  • Won’t impact credit score – Checking rates on Credible won’t impact your credit score
  • Data privacy – We don’t sell your information, so you won’t get calls or emails from multiple lenders

See Your Refinancing Options
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About the author

Eric Rosenberg

Eric Rosenberg

Eric Rosenberg is a Credible expert on personal finance. His work has been featured at Business Insider, Investopedia, The Balance, The Huffington Post, MSN Money, Yahoo Finance, Mint.com and more.

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Bad Credit

If You Want Consumers to Lose, Network Regulation is a Must – Digital Transactions

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After the current U.S. Congress was sworn in, a predictable chorus of merchants, lobbyists, and lawmakers demanded new interchange price caps and other government mandates to decrease credit card interchange fees for merchants. The tired attacks on credit cards are an easy narrative that focuses almost exclusively on the cost side of the ledger, while completely ignoring the cards’ important role in the economy and the regressive effects of interchange regulation. 

To lawmakers blindly acting on behalf of retailers, regulation is a brilliant idea—regardless of how it affects their constituents. For decades, they have promised these interventions would eventually benefit consumers. But the lessons from the Durbin Amendment in the United States and price cap regulation in Australia is clear. Although some policymakers bemoan the current economic model, arbitrarily “cutting” rates for the sake of cuts completely ignores the economic reality that as billions of dollars move to merchants, billions are lost by consumers. 

For the uninitiated, let’s break down what credit interchange funds: 1) the cost of fraud; 2) more than $40 billion in consumers rewards; 3) the cost of nonpayment by consumers, which is typically 4% of revolving credit; 4) more than $300 billion in credit floats to U.S. consumers; and 5) drastically higher “ticket lift” for merchants. 

Johnson: “To lawmakers blindly acting on behalf of retailers, regulation is a brilliant idea—regardless of how it affects their constituents.”

These are just some of the benefits. If costs were all that mattered, American Express wouldn’t exist. Until recently, it was by far the most expensive U.S. network. Yet, merchants still took AmEx because they knew the average AmEx “swipe” was around $140, far more than Visa and Mastercard. 

Put simply, for a few basis points, interchange functions as a small insurance policy to safeguard retailers from the threat of fraud and nonpayment by consumers. Consider the amount of ink spilled on interchange when no one mentions that the chargeoff rate for issuing banks on bad credit card debt exceeds credit interchange.

Looking abroad, interchange opponents cite Australia, which halved interchange fees nearly 20 years ago, as a glowing example of how to regulate credit cards. In truth, Australia’s regulations have harmed consumers, reduced their options, and forced Australians to pay more for less appealing credit card products. 

First, the cost of a basic credit card is $60 USD in many Australian banks. How many millions of Americans would lose access to credit if the annual cost went from $0 to $60? Can you imagine the consumer outrage? 

In a two-sided market like credit cards, any regulated shift to one side acts a massive tax on the other. For Australians, the new tax fell on cardholders. There, annual fees for standard cards rose by nearly 25%, according to an analysis by global consulting firm CRA International. Fees for rewards cards skyrocketed by as much as 77%.

Many no-fee credit cards were no longer financially viable. As a result, they were pulled from the market, leaving lower income Australians, as well as young people working to establish credit, with few viable options in the credit card market.

Even the benefits that lead many people to sign up for credit cards in the first place have been substantially diluted in Australia because of the reduction of interchange fees. In fact, the value of rewards points fell by approximately 23% after the country cut interchange fees.

Efforts to add interchange price caps would have a similar effect here in the U.S. A 50% cut would amount to a $40 billion to $50 billion wealth transfer from consumers and issuers to merchants. For the 20 million or so financially marginalized Americans, what will their access to credit be when issuers find a $50 billion hole in their balance sheets? 

The average American generates $167 per year in rewards, according to the Consumer Financial Protection Bureau. Perks like airline miles, hotel points, and cashback rewards would be decimated and would likely be just the province of the rich after regulation. Many middle-class consumers could say goodbye to family vacations booked at almost no cost thanks to credit card rewards.

As the travel industry and retailers fight to bounce back from the impact of the pandemic, slashing consumer rewards and reducing the attractiveness of already-fragile businesses is the last thing lawmakers and regulators in Washington should undertake.

Proposals to follow Australia’s misguided lead in capping interchange may allow retailers to snatch a few extra basis points, but the consequences would be disastrous for consumers. Cards would simply be less valuable and more expensive for Americans, and millions of consumers would lose access to credit. University of Pennsylvania Professor Natasha Sarin estimates debit price caps alone cost consumers $3 billion. How much more would consumers have to pay under Durbin 2.0?

Members of Congress and other leaders should learn from Australia and Durbin 1.0 to avoid making the same mistake twice.

—Drew Johnson is a senior fellow at the National Center for Public Policy Research, Washington, D.C.

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Increase Your Credit Score With Michael Carrington

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More than ever before, your debt and credit records can negatively impact you or your family’s life if left unmanaged. Sadly, many Americans feel entirely helpless about their credit score’s present state and the steps they need to take to fix a less-than-perfect score. This is where Michael Carrington, founder of Tier 1 Credit Specialist, comes in. Michael is determined to offer thousands of Americans an educated, informed approach towards credit restoration.

Michael understands the plight that having a bad credit score can bring into your life. His first financial industry job was working as a home mortgage loan analyst for one of the nation’s largest lenders. Early on, he had to work a grueling schedule which included several jobs seven days a week while putting in almost 12-hour days to make $5,000 monthly to get by barely.

“I was tired of living a mediocre life and was determined to increase the value that I can offer others through my knowledge of the finance industry – I started reading all of the necessary books, networking with industry professionals, and investing in mentorship,” shares Michael Carrington. “I got my break when I was able to grow a seven-figure credit repair and funding organization that is flexible enough to address the financial needs of thousands of Americans.”

With his vast experience in the business world, establishing himself as a well-respected business leader, Michael Carrington felt he had the power to help millions of Americas in restoring their credit. Michael learned the FICO system, stayed up to date on the Fair Credit Reporting Act (FCRA), found ways to improve his credit score, and started showing others.

The Tier 1 Credit Specialist uses a tested and proven approach to educate their clients on everything credit scores. Michael is leveraging his experience as a home mortgage professional, marketing executive, and global business coach to inform his clients. He and his team take their time to carefully go through their client’s credit records as they try to find the root of their problem and find suitable financial solutions.

The company is changing lives all over America as it helps families and individuals to repair their credit scores, gain access to lower interest rates on loans and get better jobs. What Tier 1 Credit Specialists is offering many Americans is a chance at financial freedom.

Michael Carrington has repaired over $8 million in debt write-ups and has helped fund American’s with over $4 million through thousands of fixed reports. “I credit our success to being people-focused,” he often says. “The amount of success that we create is going to be in direct proportion to the amount of value that we provide people – not just our customers – people.”

Because of its ‘people-focused goals, the Tier 1 Credit Specialist is determined to help millions of Americans achieve financial literacy. It is currently receiving raving reviews from clients who are completely happy with the credit repair solutions that the company has provided them.

Today, Michael Carrington is continuing with a new initiative to serve more Americans who suffer from bad credit due to little or no access to affordable resources for repair.

The Tier 1 Credit Socialist brand is changing the outlook of many families across America. To do this, the company has created an affiliate system that will provide more people with ways of earning during these tough economic times.

As a well-respected international business leader and entrepreneur with numerous achievements to his name Michael Carrington aims to help millions of Americans achieve the financial freedom, he is experiencing today. Tier 1 Credit Socialist is one of the most effective credit repair brands on the market right now, and they have no plans for slowing down in 2021!

Learn more about Michael Carrington by visiting his Instagram account or checking out the Tier 1 Credit Specialist website.

Published April 17th, 2021



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Does Having a Bank Account With an Issuer Make Credit Card Approval Easier?

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Better the risk you know than the one you don’t.

When it comes to personal finance, nothing is guaranteed. That goes double for credit. That’s why, no matter how perfect your credit or how many times you’ve applied for a new credit card, there’s always that moment of doubt while you wait for a decision.

Issuing banks look at a wide range of factors when making a decision — and your credit score is only one of them. They look at your entire credit history, and consider things like your income and even your history with the bank itself.

For example, if you defaulted on a credit card with a given bank 15 years ago, that mistake is likely long gone from your credit reports. To you and the three major credit bureaus, it is ancient history. But banks are like elephants — they never forget. And that mistake could be enough to stop your approval.

But does it go the other way, too? Does having a bank account that’s in good standing with an issuer make you more likely to get approved? While there’s no clear-cut answer, there are a few cases when it could help.

A good relationship may weigh in your favor

Credit card issuers rarely come right out and say much about their approval processes, so we often have to rely on anecdotal evidence to get an idea of what works. That said, you can find a number of stories of folks who have been approved for a credit card they were previously denied for after they opened a savings or checking account with the issuer.

These types of stories are more common at the extreme ends of the card range. If you have a borderline bad credit score, for instance, having a long, positive banking history with the issuer — like no overdrafts or other problems — may weigh in your favor when applying for a credit card. That’s because the bank is able to see that you have regular income and don’t overspend.

Similarly, a healthy savings or investment account with a bank could be a helpful factor when applying for a high-end rewards credit card. This allows the bank to see that you can afford its product and that you have the type of funds required to put some serious spend on it.

Having a good banking relationship with an issuer can be particularly helpful when the economy is questionable and banks are tightening their proverbial pursestrings. When trying to minimize risk, going with applicants you’ve known for years simply makes more sense than starting fresh with a stranger.

Some banks provide targeted offers

Another way having a previous banking relationship with an issuer can help is when you can receive targeted credit card offers. These are sort of like invitations to apply for a card that the bank thinks will be a good fit for you. While approval for targeted offers is still not guaranteed, some types of targeted offers can be almost as good.

For example, the only confirmed way to get around Chase’s 5/24 rule (which is that any card application will be automatically denied if you’ve opened five or more cards in the last 24 months) is to receive a special “just for you” offer through your online Chase account. When these offers show up — they’re marked with a special black star — they will generally lead to an approval, no matter what your current 5/24 status.

Credit unions require membership

For the most part, you aren’t usually required to have a bank account with a particular issuer to get a credit card with that bank. However, there is one big exception: credit unions. Due to the different structure of a credit union vs. a bank, credit unions only offer their products to current members of the credit union.

To become a member, you need to actually have a stake in that credit union. In most cases, this is done by opening a savings account and maintaining a small balance — $5 is a common minimum.

You can only apply for a credit union credit card once you’ve joined, so a bank account is an actual requirement in this case. That said, your chances of being approved once you’re a member aren’t necessarily impacted by how much money you have in the account.

In general, while having a bank account with an issuer may be helpful in some cases, it’s not a cure-all for bad credit. Your credit history will always have more impact than your banking history when it comes to getting approved for a credit card.

For more information on bad credit, check out our guide to learn how to rebuild your credit.

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