Managing Student Financial Aid and Loan Debt During Difficult Economic Times

ALBANY, NY (03/17/2009)(readMedia)-- The New York State Higher Education Services Corporation (HESC) offers advice for students and families who are seeking financial aid or repaying student loans during these challenging economic times. HESC is the state agency that helps people pay for college.

College-bound students and families are encouraged to file the Free Application for Federal Student Aid. The FAFSA is used to determine eligibility for federal and state grants, federal loans, and some institutional scholarships. The information used on the FAFSA includes income from 2008.

Students and families whose income has been impacted by the economic downturn because of unemployment or other circumstances can ask the college financial aid office for a review based on their 2009 estimated income.

Colleges may consider adjustments to their original financial aid awards based on increased or unusual expenses associated with lay off, moving, extraordinary health care requirements, or other significant changes in personal circumstances.

Borrowers in repayment on federal student loans who are having difficulty making monthly payments because of economic hardship also have options. Depending on your situation, you may apply for forbearance, which is a temporary reduction in your regularly scheduled monthly payment on your federal loan; or request a deferral, meaning your lender may suspend your loan payments for a specified period of time. These requests are made directly to the lender and are granted at their discretion.

It is important to avoid defaulting on your student loan. If you fail to pay or do not contact your lender when you cannot meet your obligation, your account may end up in default, which has serious consequences.

Remember, college financial aid remains available. Visit HESC's Web site at www.hesc.org to learn more about federal and state financial aid, grants, scholarships, loans and debt management options.

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