Loan Deferment and Forbearance
If you have trouble making your education loan payments, you may qualify for a deferment (a temporary suspension of loan payments for specific situations such as re-enrollment in school, unemployment or economic hardship) or a forbearance (a temporary postponement or reduction of payments for a period of time because you are experiencing financial difficulty).
These periods do not count toward the length of time you have to repay your loan. You cannot get a deferment or forbearance for a loan that is already in default. You must continue making payments on your student loan until you have been notified that a deferment or forbearance has been granted.
Deferment
A deferment is a period of time during which no payments are required and interest continues to accrue on the unsubsidized portion. Interest does not accrue on the subsidized portion. PLUS borrowers may defer repayment while the student is enrolled at least half-time. To qualify for a deferment, you must meet at least one of the eligibility requirements listed below, with certain conditions:
- Be enrolled at least half-time (at least six credit hours) at a postsecondary school
- Study in an approved graduate fellowship program or in an approved rehabilitation training program for the disabled
- Be unable to find full-time employment (up to three years)
- Face an economic hardship including Peace Corps Service (up to three years)
- Be on Active Military Duty - If a borrower is called to active duty during a war, other military operation or national emergency and if the borrower was serving on or after Oct. 1, 2007, the borrower qualifies for an additional 180-day period following the demobilization date for the qualifying service.
Forbearance
If you temporarily cannot meet your repayment schedule, but you are not eligible for a deferment, your lender might grant you forbearance for a limited and specific period of time. Interest continues to accrue and you are responsible to pay it. Generally, your lender can grant forbearance for periods up to 12 months at a time, for a maximum of three years. You will need to provide documentation to the lender to show why you should be granted forbearance. The lender must send you a notice confirming the terms that were agreed to and record them in your file. Receiving a forbearance is not automatic: you must apply for it.
Is deferment or forbearance right for me?
If you are struggling to repay your loans due to a temporary circumstance, deferment or forbearance may be a good short-term solution.
If you are having trouble repaying your loans due to circumstances that may continue for an extended period, or if you are unsure when you will be able to afford to make your monthly loan payments again, a better option may be to consider changing to an income-driven repayment plan. Income-driven repayment plans base your monthly payments on your income and family size, and in some cases your payment could be as low as $0 per month. They can also provide loan forgiveness if your loan is not repaid after 20 or 25 years.
Always contact your loan servicer immediately if you are having trouble making your student loan payments.
