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Student loans repayment protection exists as an insurance that will help you pay off your loans during difficult financial times. Both Federal and Private student loans offer repayment protection programs.

These repayment programs come in few categories. The federal programs include the income based repayment option, economic hardship deferment, and forbearance.

When it comes to private student loans the well known private student loan repayment protection program is called SafeStart from BridgeSpan Financial LLC.

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Depending who provided you with the student loan you will have the option to buy this protection insurance from the federal government or private institution.

As we talked before there are at least three programs available from the U.S. Department of Education that offer repayment relief for borrowers who are having trouble repaying their Student Loans.

The program bases your payments on a percentage of your discretionary income instead of the amount you owe. Long story short it lowers your monthly bill.

It is very useful for borrowers whose debt to income ratio for their federal loans is 1.5 or more. Borrowers with low-income who have debt that is about the same as their income will benefit from this program.

Most borrowers could have a monthly debt burden that is less than 10% of their adjusted gross income under this repayment plan. On top of that, if your income is less than 15% of the poverty line you monthly payment is 0.

The bad news is income based repayment is available only for Federal Student Loans, not Private Student Loans.

The economic hardship deferment gives borrowers an option to suspend payments on Federal Student Loans in one year increments for up to three years. This means you do not have to pay anything for a given period. It gives you options to raise money, get a job, or wait for better times.

The interest on Federal Stafford Loans Subsidized and the portion of a consolidation loan that repaid a subsidized loan is paid by the federal government during the deferment.

Interest on Federal Stafford Loans UnSubsidized continues to accrue and is capitalized, causing the loan balance to grow.

A forbearance program is very similar to deferment. It allows borrowers to suspend payments on their education loans, but interest accrues on all loans including Federal Stafford Loans Subsidized. Student should apply for deferment before trying forbearance as the deferment option is cheaper.

Forbearance on Federal Student Loans are granted in one year increments for up to five years. Forbearance on Federal Stafford Loans UnSubsidized are granted in three month increments for up to a year.

There are no fees for forbearance program on federal education loans, but some Student Loan Lenders may charge fees on unsubsidized loans.

This is a private program protecting Private Student Loans provides an interest free line of credit for borrowers. They can use to make up to 12 quarterly draws during the first five years after graduation and pay the loan using the line of credit. Each draw covers three monthly payments on the borrower's student loans, for a total of 36 months of coverage.

In order to receive this financial hardship protection, borrowers must pay an up front commitment fee of 4% to 9% of the loan amount when the loan is borrowed.

Financial hardship protection is only available to SafeStart customers after they have graduated. Those who drop out without graduating are not eligible. As an applicant you must also be able to demonstrate financial hardship in order to draw on the line of credit.