Can You Postpone Student Loan Payments After a Car Accident?

Yes—there are options to postpone your student loan payments after a car accident, depending on the specifics of your case and eligibility.

A car accident can have serious financial and physical consequences. If you've been injured, you may be unable to work, making it difficult to keep up with bills, including your student loan payments. Fortunately, options are available that may allow you to temporarily postpone or reduce your student loan payments while you recover. 

Understanding these options can help ease your financial burden and provide the time needed to focus on healing. If you struggle to navigate the complex aftermath of a car accident, whether it’s pausing loan payments or seeking compensation from the at-fault party, Morgan & Morgan is here to help. Get a free case evaluation in minutes and learn more about your legal options.

Understanding Student Loan Deferment and Forbearance

When facing financial hardship due to a car accident, two primary options for postponing student loan payments are deferment and forbearance. Each option has different qualifications and consequences, making it essential to choose the one that best suits your situation.

Deferment

Deferment allows borrowers to temporarily pause their loan payments without accruing interest on certain types of loans. To qualify for deferment, you must meet specific criteria established by your loan servicer or the U.S. Department of Education.

Types of Loans Eligible for Interest-Free Deferment:

• Direct Subsidized Loans
• Subsidized Federal Stafford Loans
• Federal Perkins Loans

Types of Loans That Accrue Interest During Deferment:

• Direct Unsubsidized Loans
• Unsubsidized Federal Stafford Loans
• PLUS Loans
• Private student loans (depends on lender policies)

If your injuries have led to temporary disability or financial hardship, you may be eligible for economic hardship deferment or temporary total disability deferment. Your loan servicer may require medical documentation or proof of financial hardship.

Forbearance

Forbearance is another option for borrowers who do not qualify for deferment. Unlike deferment, interest continues to accrue on all types of loans during the forbearance period, increasing the total repayment amount.

Types of Forbearance:

• General (Discretionary) Forbearance: Your loan servicer can grant forbearance due to financial difficulties, medical expenses, or other hardships, including recovery from a car accident.
• Mandatory Forbearance: If you meet specific criteria (such as excessive medical debt), your loan servicer must grant forbearance.

How to Request a Deferment or Forbearance After a Car Accident

If you’re struggling to make student loan payments due to a car accident, you should take the following steps to request deferment or forbearance:

Step 1: Contact Your Loan Servicer

Immediately reach out to your loan servicer to discuss your financial situation. They will provide guidance on the best options available and the required paperwork.

Step 2: Gather Documentation

Depending on your situation, you may need to provide:

• A medical report detailing your injuries and recovery time
• Proof of employment loss or reduced income
• Hospital bills and medical expense documentation
• A letter from your physician if applying for disability-related deferment

Step 3: Submit an Application

Complete the necessary deferment or forbearance request forms. These forms are usually available on your loan servicer’s website. Ensure all required documentation is attached before submission.

Step 4: Continue Communication

Until you receive official confirmation, continue making payments if possible. If your request is denied, you can appeal or explore alternative repayment plans.

Exploring Income-Driven Repayment Plans

If you do not qualify for deferment or forbearance, an Income-Driven Repayment (IDR) Plan may provide relief by adjusting your payments based on your income and family size. Available plans include:

• Income-Based Repayment (IBR)
• Pay As You Earn (PAYE)
• Revised Pay As You Earn (REPAYE)
• Income-Contingent Repayment (ICR)

If your income is low due to injuries and lost wages, these plans may reduce your monthly payments to as little as $0.

Loan Discharge Due to Total and Permanent Disability

If your car accident results in a total and permanent disability (TPD), you may qualify for a Total and Permanent Disability Discharge of your federal student loans. To apply:

• Obtain certification from a physician confirming your disability.
• Submit an application through the U.S. Department of Education’s TPD Discharge website.
• Provide supporting documentation, such as Social Security Disability Insurance (SSDI) or Veterans Affairs disability benefits.

Can Personal Injury Settlements Cover Student Loan Payments?

You shouldn’t have to bear the burden of someone else’s mistake if you were injured in a car accident that wasn’t your fault. In these cases, you can pursue a personal injury claim with the help of Morgan & Morgan’s experienced car accident lawyers.

If you’re pursuing a personal injury lawsuit due to your car accident, any settlement or verdict in your favor may be used to cover student loan payments. Compensation from a personal injury claim can include:

• Medical expenses
• Lost wages
• Pain and suffering
• Future earning capacity

An experienced personal injury attorney can help you navigate your legal options and seek the compensation needed to cover financial obligations like student loans.

Steps to Take If You’re Struggling to Pay Student Loans After a Car Accident

• Assess Your Finances: Determine how much you can afford to pay toward your loans.
• Explore Repayment Assistance: Look into deferment, forbearance, or income-driven repayment options.
• Apply for Assistance Promptly: Submit deferment or forbearance applications before missing payments to avoid delinquency or default.
• Consult an Attorney: If your accident was caused by someone else’s negligence, an attorney at Morgan & Morgan can help you recover damages to ease your financial burden.
• Stay Informed: Review student loan policies and updates, as relief programs may change.

Morgan & Morgan Is Here to Help

Recovering from a car accident is challenging enough without the added stress of student loan payments. Fortunately, options like deferment, forbearance, income-driven repayment, or even disability discharge can provide financial relief. 

Most importantly, if your accident was caused by another party’s negligence, you may be entitled to compensation that can help cover your student loans and other expenses.

At Morgan & Morgan, we fight For the People, ensuring that injury victims receive the justice and compensation they deserve. If you need legal assistance after a car accident, contact us today. Hiring one of our lawyers is easy, and you can get started in minutes with a free case evaluation.

Frequently Asked Questions

Do I need a lawyer?

If someone else caused your accident, whether on purpose or due to negligence, you should contact a lawyer right away to learn more about your legal options and how you may be compensated for the expenses the accident has cost you.

You can get a free, no-obligation case evaluation from Morgan & Morgan in minutes.

How much does a lawyer cost?

At Morgan & Morgan, there are no upfront fees to work with us or to learn more about your legal options. That’s right—the Fee Is Free®, and you only pay if we win your case. If you don’t recover a settlement or get a successful verdict, you won’t owe a dime.

What if I was partially at fault for the accident?

If you were partially at fault for the accident, you may still have options to postpone your student loan payments. Many deferment and forbearance programs do not consider fault but rather focus on your financial situation. 

Additionally, depending on your state's comparative negligence laws, you may still be eligible for compensation to cover medical expenses and lost wages. Consulting with a personal injury attorney can help determine if you are entitled to a settlement that can ease your financial burdens, including student loan payments. Contact us today to learn more.