Many college and university students take student loans to help pay for their education. The vast majority of these loans are offered through the Federal Student Aid program, which is administered by the U.S. Department of Education. If you have trouble making the loan payments when they become due, federal regulations provide certain ways to obtain a deferment, which is a legal way of postponing the payments. Depending on the loan, you may have to pay the interest on the loan during the deferment.
Apply for Deferment
Federal rules may entitle you to obtain a deferment under certain circumstances, but you must actually apply to receive the deferment. You need to contact the organization that is servicing your student loan; this is the organization that sends your statements and that you send the payments to. Your loan payments usually cannot be more than 270 days delinquent to be able to apply. Until you have received an official approval of a deferment, all your payments are still required to be paid as they come due.
Education and Economic Deferments
A common type of deferment is for going back to school. This applies to attending a postsecondary school at least on a half-time status or being enrolled in a graduate fellowship program. The other common deferment type is for economic hardship reasons. Showing that you are unable to secure full-time employment falls under this category.
Student loan payments can be deferred if you enter active service in the various branches of the U.S. military. The deferment will last until 180 days after you leave active service. This type of deferment also applies to borrowers who serve in qualifying National Guard duty. If you are part of the U.S. armed forces reserves and called into active service while attending school, your deferment will last until 13 months after your active duty ends.
If your student loan is government subsidized, interest will not be due during the deferment. Interest charges are added during deferment for non-subsidized loans. Your payments are automatically postponed for at least six months after graduation or leaving school. If you are a teacher working in high demand subject areas or economically depressed regions, special deferments are available. This is also true if you join and work in the Peace Corps. If you are not eligible for a deferment, you can still apply for a postponement of payments by applying for a forbearance, which can be given on an individual, case-by-case basis. In a forbearance, the lender reduces payments or lets you stop making payments for a specific period, but the interest on the loan will continue to accrue
- Federal Student Aid: Department of Education: Repay Your Loans: Postponing Repayment
- Federal Student Aid: Department of Education: Repay Your Loans: Postponing Repayment: Loan Deferment Summary Chart
- Federal Student Aid: Department of Education: Repay Your Loans: Repayment Information
- NOLO: Legal Topics: Debt Management: Student Loan Debt: Student Loans: Cancellation, Deferment, and Forbearance
Kerry Zias has been a strategic business consultant and college instructor of business administration courses since 1990. He has taught courses and performed professional consulting work in the areas of marketing, management, business start-ups, entrepreneurship, real estate, sales psychology and performance, business communications, business law and political/governmental relations. Zias holds a Master of Business Administration in marketing from National University.