A student loan deferment is a form of temporary waiving of your federal student loan. By applying for a student loan deferment, you will only be able to postpone reimbursing your scheduled payments only for a limited time. This does not mean that you will be exempted from paying your full debt.
Another thing you must be aware of before committing to a student loan deferment is that this waiving form only postpones your payments, but does not affect the interest. Furthermore, when applying for a student deferment loan, the interest will still accrue. At this point, you can either pay off your interest or postpone it for a later time.
Note that if you decide to proceed on this path, once the deferment is approved, your rates will be a lot higher than usual.
If you’re having a hard time managing your student loan, you may solicit a student loan deferment.
Because we know how hard it is to apply for a student loan deferment or what is the difference between a deferment and forebear, we have strived to gather only the most relevant data and put it in a user-friendly format.
What is a Student Loan Deferment?
The student loan deferment has been defined as being a temporary postponement of your principal, and, in some special cases, of your interest.
Furthermore, depending on what type of federal loan you have applied to, the Federal Government may pay off your interest for the rest of your deferment period. These are the major circumstances in which the Government will pay off the interest of your loan:
Subsidized Federal Stafford Loan;
Direct Subsidized Loan;
Federal Perkins Loan.
However, should you apply for an unsubsidized loan, the Federal Government will not pay the interest on your behalf. Here are the types of unsubsidized loans for which the Government will not pay off interest:
Direct Unsubsidized Loan;
Parental PLUS Loan;
Grad PLUS Loan;
Unsubsidized Stafford Loan (condition applies to all loans obtained before 7/1/2010).
Becoming Eligible for a Student Loan Deferment
Note that in order to become eligible for a such a waiving, certain conditions must be fulfilled. Depending on which type of student loan you have applied for, the Federal Government may approve or deny your temporary postponement.
Furthermore, applying for a student loan deferment does not mean that you should cease to deliver your scheduled payments. Until the deferment is approved, you should continue making the payments on time, or else you will be deemed as delinquent and lose the loan.
Below, you will find the major eligibility conditions based on the type of student loan you have applied for:
1. Direct Loans
You may become eligible for the student loan deferment under the following circumstances:
During enrollment in a career school or a college. Note that you must have at least a half-time enrollment in order to apply for the student loan deferment.
If you are enrolled in a graduate fellowship program or a Government-approved rehabilitation training program for the physically challenged.
If you’re currently unemployed or, you can’t find a full-time job. Note that the student loan deferment applies for a period of up to 3 years.
If the country passes through a period of economic hardship.
You can also become eligible for the student loan deferment in case you actively take part in the emergency military service such as a armed conflict or during a national emergency of any nature.
In the 13-month period after concluding your active military duty. This includes being part of the National Guard or any of the U. S’s armed forces reserve components.
2. FFEL Loan (includes Stafford Loans, Unsubsidized Stafford Loans, Federal PLUS Loans, and Federal Consolidation Loans)
If you’re at least half-time enrolled in a career school or college;
If you’re currently studying at a Government-approved graduate fellowship program or in a training program for the physically disabled.
If you’re unemployed or can’t find a full-time position. Note that the deferment applies for a period of 3 years.
If the country passes through a period of economic hardship.
If you actively participate in active duty military service, which includes national emergency situations, war or any kind of military operations;
After the 13-month period concluding your active military duty or until returning to enrollment. This includes being part of the National Guard or any of the U. S’s armed forces reserve components.
3. Perkins Loans
You can become eligible for the student loan deferment under the following conditions:
You must be at least enrolled half-time in a career school or in a college;
You must be enrolled in a Government-approved graduate fellowship program or in a training program for the physically disabled;
You can also apply for the student loan deferment if you are currently unemployed or incapable of securing a full-time position;
You can secure the deferment during times of economic hardship;
You can also apply for the student loan deferment after a period of service which makes you eligible for the Perking Loan discharge or the Perkins Loan cancellation.
After active duty military service in times of national emergency, war or military operations, you can apply for the student loan deferment.
You can also apply for this form of waiving after the 13-month period following active military duty service.
What is a Forbearance?
Apart from the student loan deferment, there is another type of waiving. The second form is called a forbearance, and it is, generally, sought by applicants who did not qualify for the student loan deferment.
The major difference between a deferment and a forbearance is that a student loan deferment can be approved for an extended period, while the forbearance has a limited availability (no more than 12 months).
Furthermore, in the case of a deferment, depending on which type of loan you apply for, the Federal Government may pay the interest for you. On the other hand, if you apply for a forbearance, your scheduled payments will be postponed, but you will still need to pay the interest.
As in the case of deferment, there are many types of forbearances, and the conditions vary according to their nature.
1. Discretionary Forbearance
The first type of forbearance is called discretionary because it relies solely on your lender’s willingness to grant you the forbearance. Furthermore, this type of forbearance can only be solicited in specific circumstances such as illness or financial hardship.
2. Mandatory Forbearance
The second major type of forbearances bears the name of mandatory. Compared to the discretionary forbearance which relies on your lender’s willingness to grant it, the mandatory forbearance must be granted if the solicitor fulfills the eligibility criteria.
Below, you will find the complete list of criteria which are required in order to qualify for a mandatory forbearance:
If you are currently engaged in either a dental or a medical internship program, and you meet the necessary requirements, then you can apply for forbearance;
You can also apply for the mandatory forbearance if your total monthly payment exceeds 20 percent of your gross income;
If you’re performing teaching services, you may become eligible for the so-called teacher loan forgiveness;
You may also apply for the mandatory forbearance if you serve in a national service for which you have been awarded the national service award;
You can also apply for this type of forbearance if you are eligible for the partial repayment loan, as per the conditions mentioned in the U.S Department of Defense Student Loan Repayment Program.
Another condition that would make you eligible for the mandatory forbearance is that you are a member of the National Guard or that you have been activated by a governor, and you could not apply for a standard military deferment.
How to Apply for a Student Loan Deferment – Step-by-step Guide
Before applying for student loan deferment, you should make sure that you fulfill all of the eligibility conditions posted above. If that is your case, then you may take the first steps to obtaining financial aid for your student loan. Another important aspect to keep in mind is that working with your school’s Financial Aid office or with your loan services is paramount to your deferment approval.
Always investigate alternatives: do I qualify for the student loan deferment or for the forbearance? If everything is in order, here’s what you will need to do in order to apply for the deferment:
Check with your loan servicer or with your school’s Financial Aid Office. They will tell you what type of paperwork needs to be filled, how to fill these papers, what type of waiving is best for you and what are the major requirements.
Based on your overall situation, you may be required to present additional documentation. For example, if you are requesting a deferment on the basis of unemployment, you will need to present some sort of document which proves that you are either employed in a part-time job or that you have received unemployment checks from the Government. On the other hand, if you are currently serving in the military or have enrolled in the Peace Corps, you will need to show proof.
Please fill in the paperwork provided by your school’s financial aid office or by your loan services. Here are all the papers you will need to fill in order to apply for a student loan deferment:
After you’re finished filling the forms, the necessary documentation will be sent to the Federal Government, pending approval. You may need to wait a while for the result. In the meantime, regardless of the answer, you must continue to deliver principal and interest as scheduled.
Only after you’ve received an official answer, you may postpone delivering your payment, as per the terms dictated by your contract.
If, for some reasons, you are not capable of applying for the student loan deferment, you can try to apply for a forbearance. Here are the steps you will need to take in order to apply for this form of financial aid:
Check to see if you fulfill all the eligibility criteria. You can do this by reviewing all the relevant information posted on myfedloan.org, or by consulting with your loan servicer or with the school’s Financial Aid. We strongly recommend that you take full advantage of your local loan servicer or the Financial Aid office, as they are able to determine whether you are eligible or not. They can also answer any additional questions you may have.
Provide the necessary documentation. If you want to apply for a mandatory forbearance, then you may need to provide additional documents.
Running your paperwork. At this point, you will need to fill all the necessary documentation. Below, you will find a list with all the paperwork you will need to fill in order to apply for a forbearance. Note that you must choose the one which is more appropriate for your situation:
Mandatory Forbearance Request for student loan debt burden;
Having all the facts set on the table is always an important aspect. However, when it comes to dealing with your student loan, the necessity of covering every aspect of the topic increases exponentially. Another aspect, which is of paramount importance, is the way in which you choose to communicate with your loan handler.
If you’re a student enrolled in a college or any other form of education, please take all the time you need in order ask your Financial officer all the questions related to your student loan deferment. Furthermore, you should also take into consideration the fact that not all loan servicers you will be dealing with won’t be that understanding when it comes to reimbursing periods.
Also, there is another thing you should consider before taking up a student loan deferment. Before postponing your scheduled payments, make certain that the deferment of the forbearance has been approved.
If you decide to stop making your payments before either of the two waiving forms have been approved, you will be labeled as a delinquent, and you would have defaulted the loan.