In a perfect world, you’d be able to make your student loan payments every month without stress. But sometimes, life throws you a curveball.
If you find yourself in a difficult financial situation, you should know that there are federal programs available to assist you with making your student loan payments.
Specifically, it’s possible to apply for either student loan deferment or forbearance. These terms mean slightly different things, which we’ll discuss later. But both are a way for you to either temporarily reduce or postpone your student loan payments.
Because this can be such a vast and confusing topic, we’ve created this guide. Below, you’ll learn about the different types of student loan deferment and forbearance available. We’ll also look at how to apply for student loan deferment or forbearance, as well as some alternatives to consider first.
Note: The U.S. Department of Education has paused student loan payments and interest until December 31, 2022. You may also be eligible to have a portion of your student loans forgiven. Learn more here.
Student loan deferment is when the federal government temporarily suspends payments on your student loans.
There are many potential reasons you can get your loan payments deferred, but you generally need to fill out an application. Your loan servicer will also typically require documentation showing that you meet the eligibility requirements for deferment.
We’ll discuss the reasons you can get your loans deferred (and the application process) in a bit. But first, what’s the difference between student loan deferment and forbearance?
Generally, student loan forbearance means the same thing as deferment: you temporarily stop making federal student loan payments. There are a couple of differences, however.
First, forbearance can mean a temporary reduction of your monthly student loan payments in some cases. It’s up to your loan servicer to decide if they want to reduce or completely suspend your loan payments during the forbearance period.
Second, the circumstances that make you eligible for forbearance can be different from those for deferment. We’ll cover this more in the next couple of sections.
For now, the main thing to know is that either deferment or forbearance might be more appropriate depending on your specific life/financial situation.
So what are the reasons you can get your student loans into deferment or forbearance? Keep reading to find out.
From medical to educational to financial, there are eight main reasons you can get your student loans deferred. Here’s a look at each:
Cancer Treatment Deferment
While we hope you never have to go through cancer treatment, you should know that it’s a potential reason to defer your student loan payments.
According to the Federal Student Aid website, “You may qualify for this deferment while you are undergoing cancer treatment and for the six months after your treatment ends.”
How to apply: Fill out the Cancer Treatment Deferment Request form.
Economic Hardship Deferment
If your income is consistently very low, or if you’re receiving government financial assistance, then you may be eligible for an economic hardship deferment. Under this deferment, you can suspend payments on your eligible student loans for up to 3 years.
Specific reasons for getting an economic hardship deferment include:
- Receiving a “means-tested benefit” (such as welfare)
- Working full-time with earnings that are “below 150% of the poverty guideline for your family size and state of residence”
- Serving in the Peace Corps
How to apply: Fill out the Economic Hardship Deferment Request form.
Graduate Fellowship Deferment
Did you receive a graduate fellowship to support you while working on your research? Congratulations!
In many cases, receiving a graduate fellowship will qualify you for the graduate fellowship deferment. This is most common for doctoral students, but some master’s students may be eligible as well.
The idea is that since graduate fellowships usually provide only enough money for basic living expenses, deferring your loan payments can ease your financial burden.
How to apply: Fill out the Graduate Fellowship Deferment form.
Still in school? Then you can probably defer your federal student loan payments.
You qualify for in-school deferment if you’re “enrolled at least half-time at an eligible college or career school.” And if you’re a graduate or professional student, then you can get six months of additional deferment “after you cease to be enrolled half-time.”
Unlike most forms of deferment, in-school deferment is typically automatic. Your school will notify your loan servicer of your student status, and the servicer will then place your loans in deferment. You don’t have to fill out an application.
How to apply: Usually, your school will notify your loan servicer and handle all the necessary paperwork. If your loans aren’t automatically placed into deferment while you’re in school, you can either ask your school to report your enrollment information OR fill out the In-School Deferment Request form.
Military Service and Post-Active Duty Student Deferment
Military service is another potential reason to receive loan deferment. Here are the specific criteria:
- You’re currently on active duty military service “in connection with a war, military operation, or national emergency”
- You’ve finished “qualifying active duty service and any applicable grace period”
The first case is fairly straightforward: you can get your loans deferred for the duration of your active duty service.
The second case is a bit more complicated. If you’ve finished qualifying active duty service and any applicable grace period, then your loans will be deferred for 13 more months.
But if you enroll in a college or career school at least half-time before those 13 months are up, your deferment will end automatically.
How to apply: Fill out the Military Service and Post-Active Duty Student Deferment Request form.
Parent PLUS Borrower Deferment
This next deferment is a bit different because it applies to the parents of students. If you took out a Parent PLUS loan to pay for your dependent child’s education, then you can request a deferment.
This deferment will last for as long as the student you took out the loan for is enrolled at least half-time in an eligible college or career school. You can also continue to receive this deferment for an “additional six months after the student ceases to be enrolled at least half-time.”
How to apply: Fill out the Parent PLUS Borrower Deferment Request form. Alternatively, you may be able to request a deferment when you submit a Direct PLUS Loan Request to your child’s school. Check with the school’s financial aid office for specific guidance.
Rehabilitation Training Deferment
It’s possible to get your student loans deferred if you’re completing rehabilitation training.
Specifically, you may be eligible for a deferment if “you’re enrolled in an approved rehabilitation training program that is designed to provide vocational, drug abuse, mental health, or alcohol abuse rehabilitation treatment.”
How to apply: Fill out the Rehabilitation Training Deferment Request form.
The final reason you can get your loans deferred is unemployment. You may be eligible if you “receive unemployment benefits or you are seeking and unable to find full-time employment.”
You can receive this deferment for up to 3 years.
How to apply: Fill out the Unemployment Deferment Request form.
As you can see, there are lots of potential reasons you can get a student loan deferment. Student loan forbearance is no different, with a variety of reasons you can temporarily reduce or cease your student loan payments.
Here’s a look at each reason in detail:
There are two main types of loan forbearance: general and mandatory.
With general forbearance, it’s up to your loan servicer to decide if you qualify. For this reason, it’s sometimes called “discretionary forbearance.”
Potential reasons to receive general forbearance include:
- Financial difficulties
- Medical expenses
- Change in employment
- Other reasons acceptable to your loan servicer
Discretionary forbearance is available for all Direct Loans, Federal Family Education (FFEL) Program loans, and Perkins Loans.
Your loan servicer can grant a general forbearance for no more than 12 months at a time, and for no more than 3 years cumulatively.
How to apply: Complete the General Forbearance Request form.
Mandatory forbearance is the other main type of student loan forbearance. It’s “mandatory” because if you meet the criteria, your loan servicer is required to grant it.
You may receive a mandatory forbearance for up to 12 months at a time. If you still meet the eligibility requirements after your current forbearance expires, you can request an additional mandatory forbearance.
Here are the reasons you might be eligible for mandatory forbearance:
To be eligible for this forbearance, you must be “serving in an AmeriCorps position for which you received a national service award.”
How to apply: Follow the instructions on the AmeriCorps website.
Department of Defense Student Loan Repayment Program
This next form of mandatory forbearance is an interesting case. You may be eligible for mandatory forbearance if you “qualify for partial repayment of your loans under the U.S. Department of Defense Student Loan Repayment Program.”
Essentially, the Department of Defense can repay part of your student loans as a recruitment or retention tool.
You can learn more about the program here. But if you’re applying for this form of forbearance, you probably know the details.
How to apply: Fill out this form.
Medical or Dental Internship or Residency
Are you completing a medical or dental internship or residency? Then you may be eligible for a mandatory forbearance.
You’re eligible if you meet the following criteria:
- You’ve been accepted into a medical/dental internship or residency
- Your program required a bachelor’s degree for admission
- You’ll receive supervised training as part of your program
- Completion of your program will “lead to a degree or certificate awarded by an institution of higher education, a hospital, or a health care facility that offers postgraduate training” OR completion of your program is required before you can begin professional practice/service
How to apply: Fill out this form.
National Guard Duty
If you belong to the National Guard and have been activated by a governor, then you’re likely eligible for National Guard Duty forbearance. You can only receive this forbearance if you aren’t eligible for a military deferment (see above).
How to apply: Fill out this form.
Student Loan Debt Burden
If your student loan debt is too high relative to your income, you may request a mandatory forbearance.
To be eligible, your total monthly payment for all your federal student loans must be 20% or more of your total monthly gross income.
For instance, if your gross monthly income were $4,000, a monthly loan payment of $800 or more would make you eligible for mandatory forbearance.
How to apply: Fill out this form.
Teacher Loan Forgiveness
The final reason you can get mandatory forbearance is teacher loan forgiveness. You’re eligible if you’re “performing teaching service that would qualify you for teacher loan forgiveness.”
You can learn more about the teacher loan forgiveness program and requirements here. That will help you determine if you’re eligible for this form of forbearance.
How to apply: Fill out this form.
To round out this article, here are answers to some common questions about student loan deferment and forbearance.
Does interest accrue on my loans during deferment or forbearance?
Typically, yes. If your loan is in forbearance, then interest will continue to accrue even when you aren’t making payments.
You can choose to pay this interest each month, or you can let it be capitalized at the end of your forbearance. If your interest is capitalized, it will be added to your total loan principal balance.
If your loan is in deferment, then interest may or may not accrue depending on the type of loan. You generally aren’t responsible for paying interest on the following loan types while you’re in deferment:
- Direct Subsidized Loans
- Subsidized Federal Stafford Loans
- Federal Perkins Loans
- The subsidized portion of FFEL Consolidation Loans (which are less common these days since the program ended in 2010)
Otherwise, you’ll typically be responsible for paying any interest that accrues during deferment. As with loans in forbearance, you can choose to pay this interest each month or have it capitalized at the end of your deferment period.
If you let the interest be capitalized, it will be added to your loan principal balance.
How will student loan deferment and forbearance affect my overall loan payments?
As we alluded to in the previous section, interest generally continues to accrue on your student loans while they’re in deferment or forbearance.
If you keep paying the interest as it accrues, then your total loan balance will remain the same when you resume making payments.
However, if you don’t pay the interest, then it will be added to your total loan principal balance. This means you’ll owe more overall, thus increasing the amount of time it will take you to pay off the loan.
For instance, let’s say you have a $10,000 student loan balance with an average interest rate of 4%. Your loan goes into forbearance for 12 months, during which $400 of interest accrues.
Because you don’t pay any of the interest during forbearance, the interest gets capitalized when your forbearance ends. Your principal balance is now $10,400.
A higher principal balance means you’re making reverse progress on repaying your loans. And it also means more money on which interest can accrue, setting you back even further. For these reasons, we strongly recommend paying the interest on your student loans even while they’re in forbearance or deferment.
Are there alternatives to student loan deferment or forbearance?
Yes! While forbearance or deferment can be a life-saving relief in dire circumstances, they shouldn’t be your first choice. If you’re struggling to afford your monthly loan payments, we recommend applying for an income-driven repayment plan.
Under an income-driven repayment plan, the Department of Education lowers your monthly payment to an amount that’s manageable for your income and family size.
Your repayment period will also increase (typically to between 20 and 25 years). If you still haven’t repaid your loans at the end of the repayment period, the remaining balance will be forgiven.
Are forbearance and deferment available for private student loans?
Ultimately, it’s up to your lender to decide if they want to grant you a temporary suspension or reduction of payments.
It is possible in some cases, but none of the federal programs we’ve discussed in this article apply to private student loans.
I hope this article has made you aware of all the different types of student loan assistance available. We hope you never have to use any of them, but they’re there in case you need them.
And if you’re struggling to pay your student loans for any reason, be sure to contact your loan servicer promptly. They can help you figure out the best way to make your payments more manageable.
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