Student Loan Forbearance Request Denied?

Question

I am hoping someone might be able to help me or at least share some options for what I might be able to do. I recently graduated from college about 6 months ago. I joined a volunteer program that is not through Peace Corps or any other recognized official United States service. I am volunteering through a program in Israel known as MASA. This program was offered for 5 months with an optional extension of 5 months, so 10 months total. I decided to stay continuing my volunteer service learning program.

I had been hoping for the best but expecting the worst -- and the worst did happen. And I wasn't sure of a backup plan. 

My student loan is through Citibank. I have a private loan through them as well as a Federal Stafford Loan and an Unsubsidized Federal Stafford Loan. I knew my grace period would be up after 6 months so I requested a deferment. After speaking with someone from the Citibank Student Loan corporation, they said that I would be eligible for a forbearance request. The woman I spoke with -- and I don't recall her name -- said it likely wouldn't be a problem. This was probably a little less than a month ago. They sent the Forbearance Request forms to me, which I had a relative in the US scan for me. I filled it out and after figuring out how I could get it back to the company on time, they emailed me stating (and I have a copy) I could rescan it and send it as an attachment through email. I even included the links to the attached documents. After about a week of sending it three times, they kept returning a message of: We are unable to receive your attached message, please send it via fax.

I was unable to get to a working fax machine so I rescanned it and sent it to my relative, who printed it out and sent it via USPS. I had the letter sent in the beginning of the week and at the end of the week, it was returned. They sent a letter back saying that my forbearance request -- for all three loans -- was denied. The message for all 3 loans was: "Your Private Loan Forbearance Application was received beyond the 30-day limit. As previously explained, your application must have been received within 30 days from the date in which we spoke with you on the phone."

I admit that I cannot recall exactly when the date was that I spoke to them on the phone. It doesn't state in the application when the date was. I had gone through problems with them for about a week before they would even accept the application from me. I am in another country so I explained to them my situation might take a little more time.

My first payment is required in 2 days -- March 9, 2011 and I cannot make this payment. So, my forbearance request has been denied. I do not want to go into default. I do not have money in the bank to begin paying any type of monthly sum. Even if I return to the United States early which would require a change of flight plans and dropping out of the program I am in early, I would still have to find a job, which will take time, and that would prevent me from paying back my student loans immediately anyway. So my plans were to stay here for the remainder of the semester, return home, get a job, and begin paying back my student loans after my forbearance period was up. But I am not sure what to do with this dilemma - as I did not expect to get denied. 

Does anyone have any advice for how to handle this situation?

mmkess · Accepted Answer

You have exceeded the application period. Its just like applying for food stamps and medicaid. There are only so many days from the date you apply or request it for all the necessary paperwork to be filled out and returned on your part. All you need to do is call and request a deferment again. Explain the situation. They will send you one. This time fill out the papers and send them immediately to the relative instead of trying via email. You now know that method doesn't work. If you send the application in the way that works the first time you shouldn't have any problems.

Other reasons you may have trouble getting a deferment: If you are unemployed but not eligible for unemployment compensation you could be denied. Most unemployment deferments follow the same qualifications for receiving federal or state unemployment. Often people do not qualify for one without qualifying for the other. 

They will want you actively seeking work if you are able. If your volunteer program is not considered a necessary part of your continued education (like an unpaid internship would be) Citibank may not accept it as a legitimate reason for unemployment deferment.

If you are making money you can apply for an economic hardship deferment or a part time work deferment because you are not making enough money to support yourself and make adequate loan payments. In this case loan payments can either be significantly lowered or deferred for a period of time.

I do think that you will be eligible for an unemployment deferment, especially if you were originally told that you would be. As I said before, request the deferment again and be sure to return in the fastest and surest way available to you, even if that mean mailing it to a relative. You should be able to send it directly through the mail from where ever you are though. Maybe paying for expedited shipping would be better.

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