Deferment of Federal Loans
If you qualify, you can receive deferment of payments. If you foresee a change that will temporarily affect your ability to make your payments, contact you lender immediately to see if you qualify for a deferment or forbearance. Letting your lender know your situation can help prevent your loan from becoming delinquent or going into default.
A deferment allows you to postpone your payment (principal, and in some cases, interest) for a certain period of time for specific reasons recognized by the federal government. Many situations allow you to defer your loan payments. Your eligibility for a specific deferment is determined by the date your first Federal Family Education Loan Program (FFELP) loan was disbursed. The most common reasons borrowers receive a deferment include:
- Returning to school (Education-related deferment)
- Being unable to find employment of at least 30 hours per week, even though the borrower is making a conscientious effort to find work (Hardship deferment).
If your first subsidized or unsubsidized Federal Stafford or Federal SLS loan was disbursed before July 1, 1993, service in a volunteer organization may qualify you for a deferment. You will need to complete the borrower's section of a deferment form, specific to the type of deferment you are requesting. Your lender or holder will provide you with the correct form. You may also be required to provide supporting documentation and/or certification, depending upon the deferment you are requesting.
If you are requesting an in-school (study) deferment and applying for a new student loan for the same period of enrollment, you may request an in-school deferment on the Application and Promissory Note.
Loans in Default
If you are currently making student loan payments, continue to do so until your deferment request is approved by your lender. If you become delinquent in your scheduled payments, you may default and lose the option to defer future payments. In order to receive the deferment you may be required to provide supporting documentation and/or certification, depending upon the specific deferment you are requesting. Your account status affects your deferment eligibility.
Loans in default (270 days or more past due) are not eligible for deferment. In addition, your credit history will be damaged, and you will not be able to obtain credit for things such as a car or a home in the future. Delinquent accounts (less than 270 days past due) may still be eligible for deferment. If the lender grants deferment, your account can be brought current by the lender capitalizing the unpaid interest to the principal balance of your loan.
In the event you do not qualify for a deferment, you can request forbearance. Forbearance allows you to temporarily postpone or reduce your principal payments for periods of up to one year at a time. There are four types of forbearance: discretionary, administrative, mandatory and mandatory administrative. Contact your lender to discuss the type of forbearance for which you may be considered.