Student Loan Deferments

A student loan deferment allows you to postpone loan payments temporarily. Subsidized loans are not charged interest during the deferment period.   If it’s unsubsidized, interest does accrue; however, you can pay during or after the deferment period.   But, if you don’t pay it as it accrues, it is capitalized, thus increasing the amount you will have to repay.

Deferments are possible under the following circumstances:

Deferment Condition

Direct student loans

FFELs

Perkins student loans

At least half-time study at a post-secondary school

YES

YES

YES

Study in an approved graduate fellowship program or an approved rehabilitation training program for the disabled

YES

YES

YES

Unable to find full-time employment

Up to 3 Years

Up to 3 Years

Up to 3 Years

Economic hardship

Up to 3 Years

Up to 3 Years

Up to 3 Years

Engages in service listed under discharge/cancellation conditions

NO

NO

NO

Forbearance – temporary postponement of student loan payments

If you are temporarily unable to meet your repayment schedule but are not eligible for a deferment, you may receive forbearance for a specified period. During forbearance, your payments are postponed or reduced.

Forbearance depends on whether you are:

    • unable to pay due to poor health or other unforeseen personal problems.
    • serving in a medical or dental internship or residency.
    • serving in a position under the National Community Service Trust Act of 1993
    • obligated to make payments on certain federal student student-loans that are equal to or greater than 20 percent of your monthly gross income.

Whether your student loans are subsidized or unsubsidized, you will be charged interest and, unless you pay the interest as it accrues, it capitalizes, thus increasing the amount you’ll have to repay.

Deferment and forbearance is not automatic.

You must contact your loan servicing center to request either option and then follow their procedures closely for requesting a deferment or forbearance. Be prepared to provide documentation to support your request.

You must continue making scheduled payments until you receive notification that they granted deferment or forbearance. Failing to make payments on your loan places it in a default status and may negatively affect your credit rating.

For PLUS student loans and unsubsidized student loans, they defer the principal only. Interest continues to accrue.

Direct Loan borrowers who have outstanding balances on FFEL student loans disbursed before July 1993, might be eligible for additional deferments provided the outstanding balance on the FFEL existed when the borrower received their first Direct Loan.

Applies to student loans first disbursed on or after July 1, 1993, to borrowers who have no outstanding FFELs or Federal Supplemental student loans for Students (Federal SLS Program) on the date they signed their promissory note. (Note: Congress repealed the Federal SLS Program beginning with the 1994-1995 award year.)

Many Peace Corps volunteers will qualify for a deferment based on economic hardship.

More information on teaching service deferments go here and request Chapter 3 – Forbearance & Grace Periods