What should you do if you are experiencing difficulty in making loan payments?

When facing difficulty in making loan payments, considering requesting forbearance or deferment is a prudent step. Forbearance allows borrowers to temporarily stop or reduce payments without falling behind on their loans, while deferment allows for a postponement of payments, often without incurring additional interest during the period. These options are designed to provide relief for borrowers experiencing financial trouble, allowing them time to stabilize their finances without the immediate consequences of missed payments, such as damage to credit scores or increased debt due to late fees.

In contrast, ignoring the payments can lead to severe repercussions, including damage to credit ratings and potential collection actions. Transferring loans to a friend is not a viable solution, as loan agreements typically do not allow for such transfers, and it could lead to complications in repayment responsibilities. Switching to a private loan can also be a risky move, especially if private loans come with less favorable terms and fewer protections for borrowers compared to federal loans, particularly in times of financial hardship. Thus, seeking forbearance or deferment is the most responsible and effective option in managing loan repayment difficulties.