As the federal government shutdown drags out into its third week, furloughed and non-paid federal employees are beginning to feel the squeeze. Many employees have student loans and may have trouble paying their bills the longer this lasts. What can they do?

• For federal loans, it is best to continue making your payments, but if you are unable to pay your bill, you can request a temporary economic hardship forbearance. Just keep in mind that interest continues to accrue during the forbearance period. Also, forbearance will not count towards loan forgiveness. So, it should only be used as a temporary, short-term fix.
• Private loans are much more problematic. Forbearance options will be limited at best, and private lenders will likely be unwilling to work with borrowers or be flexible with payments. Borrowers should be prepared to continue making payments if they can, since missing even one or two payments can cause a private student loan to go into default. If you are unsure about your private student loan forbearance options, you can contact your private lender.

Meanwhile, as the country speeds towards default, I don’t have anything significantly new to report about federal student loan operations or federal student loan servicing. Check out last week’s post, as the situation is mostly unchanged since then. If the country breaches the debt limit this week, we might start to see more serious impacts. Hopefully it will not come to that.