Student Loan Deferment
Delay or Postpone Your Student Loan Repayment
Loan deferment programs allow you to delay loan payments for a specified term and provide practical solutions to student loan repayment for a number of unique situations:
- When you return to school, or undertake medical residency or internship.
- If you become unemployed, disabled, or experience a period of economic hardship.
- While you’re pregnant, or caring for a newborn or have just adopted a young child.
- If you’re a teacher in a high-need area.
- If you work in public service.
Remember, if you’re having problems making your monthly student loan payments and your situation is not suited to a loan deferment, contact your lender as soon as possible. With your account manager, evaluate available loan repayment options that may be a better fit such as loan forbearance or loan consolidation. No matter what, avoid loan default at all costs.
And guess what? If Federal subsidized Stafford Loans are among your student loans, the federal government will continue to pay the interest while you defer.
In-School Deferment: A Popular Choice
Attend school at least halftime as an undergraduate or graduate student and you qualify for student loan deferment for both federal loans and private student loans. Make sure you take advantage of these opportunities to put your Stafford, Perkins and PLUS loan payments on hold. You can defer both loan interest and principal. For private loans you may opt to defer both, pay only interest and defer principal, or pay both and forego deferment altogether.
**Tip: Graduate students, if you’re engaged in a fellowship program you may qualify for the same in-school deferments. Make sure you contact your financial aid office and find out what steps you must take to delay interest and principal payments.
Unemployment Deferment and Economic Hardship
If you become completely unemployed or your work hours fall below 30 per week, you should contact your lender and request an Unemployed Deferment application. Re-apply every 6 months you qualify, but be prepared to prove you are taking steps toward regaining full-time employment.
Prove income below the poverty line or meet lender hardship requirements for debt-to-income ratio and you may qualify for Economic Hardship Deferment. You can use this for up to three years, provided you reapply annually. Contact your lender for more information on meeting these requirements.
**Tip: Medical residents, check with your lender to find out if you qualify for the economic hardship deferment. Why? New residents and interns with high student loan debt versus low income often meet the requirements for this deferment option.
Teacher Loan Deferment Options
Teachers, how can you qualify for loan deferment?
- Student loans borrowed before July 1, 1993.
- Work in a high-need area.
Sound like you? Contact your lender and find out if you may be eligible for this repayment solution.
How to Defer Your Loans if You Work in Public Service or the Military
Public Service, volunteer work, and military service may give you a term of time free from federal student loan repayment for outstanding balances on loans borrowed prior to July 1, 1993. Eligible organizations include:
- Peace Corps
- US Armed Forces
- National Oceanic & Atmospheric Administration (NOAA)
- Certain Tax Exempt Organizations Deemed Acceptable by Dept. of Education
- Officer of the Commissioned Corps of Public Health of U.S.
There is a limit of three years that you can defer your student loans for public service in any combination of the above, for example two years in the Peace Corps plus one in the military.
Loan Deferment for Disabilities
In the unfortunate case that you may become disabled and unable to work for more than 60 days, or you need to care for a disabled spouse or dependant for more than 90 days, then you may be eligible for student loan deferment. A doctor must recertify your condition every six months.
Guess what? If your condition becomes a permanent disability then you can apply to have your student loan repayment completely cancelled.
Deferments for New Mothers, During Pregnancy, and for Parents on Maternity Leave
You can apply for a Parental Leave/Working Mother deferment to repay your student loans if you are currently pregnant, caring for a newborn child, or caring for a newly adopted child and have an outstanding balance on federal student loans borrowed prior to July 1, 1993.
A doctor must certify your pregnancy or child caring situation, and you will need a statement of adoption from the adoption agency for an adopted child. You have a maximum of 6 months of loan deferment for each parental leave instance, with unlimited instances. This applies whether you are unable to attend school or work. If you are in school, contact your student loan aid office for additional help.