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Student Loan Deferment and Forbearance can provide help.

A student loan deferment is when the lender or servicer grants you a temporary suspension of your monthly payments. This additional time that is given to the borrower will in effect provide a way to help you catch up on payments with your student loan debt and any other outstanding bills that built up while in college. You will not be responsible for paying the interest that accrues with a deferment. So if you qualify this can be an effective tool to use in order to get back on track. Find how to defer a student loan below.

Try to defer your student loans bills

Another option is that you can defer payment on federal loans and any related monthly bills under select circumstances, including if you lose your job, perform military service, and this is also for individuals facing an overall economic hardship. With private loans that are taken out, the rules on postponing payment (which is known as "forbearance") are set by the private lender or bank.

However, you need to do your best to avoid delaying payment if you can because what happens is that interest continues accruing on your loan unless you have a subsidized federal loan, as noted above. While graduate school is one way to defer payment on most private as well as federal loans, graduate school can backfire as it will add to your total outstanding debt.

If you think you can qualify for the unemployment deferment option on federal loans, you need to demonstrate that you are actively looking for employment.

In addition, you may be able to qualify for economic-hardship deferment on your student loans if your income qualifies you for benefits like section 8 or SNAP food stamps (or other public aid); you work in public service; or if you receive cash assistance. There may be some other criteria as well, and your lender can provide the latest guidelines. Please note that deferment for economic hardship and unemployment is limited to three years.




Qualifications for Student Loan Deferment

There are a number of qualifications that need to be met by applicants. Among them include some or all of the following. However program terms can change over time and the government, or your lender, may also have a set of different criteria in place. It is always strongly recommended to contact your bank or lender to ask about the latest application criteria.

  • Enrolled in graduate school.
  • Working less than 30 hours a week or unemployed.
  • Enrolled in school on either a half time or full-time basis.
  • In an internship/residency program.
  • Temporarily disabled or on medical leave from work.
  • Having an economic hardship that causes you to need help. This will normally involved a severe reduction in income, work hours, or some form of medical emergency.
  • Providing a public service or in the military, and deferments may also be provided to borrowers that are working for the state or federal government.
  • You are eligible for a deferment if you are teaching in a city or region that is defined as a teacher-shortage area.
  • In a rehabilitation training program.
  • Caring for a newborn or pregnant family member.
  • You are paying more than 20% of your gross monthly income on your student loans. This will also make you eligible for a deferment. This can overlap with the hardship or unemployment reasons indicated above.

The second option is a student loan forbearance. This will provide you help by offering a temporary suspension of your monthly loan payments and it will be granted under a certain number of circumstances by your lender/servicer. You still need to, and are responsible for, paying the loan interest that's accrued, so it's always better to try to get a deferment first. The fact that interest does need to be paid is the key difference between the two.





Qualifications for Student Loan Forbearance

  • Temporary Financial Hardship.
  • You can get a forbearance if you are qualified under the Student Loan Repayment Program administered by the U.S. Department of Defense.
  • You are a mobilized member of the Reserves or National Guard and are experiencing temporary and unexpected financial hardship and if you need help paying bills as a result of this.
  • Currently serve in a Community Service position (AmeriCorps) or National service position.
  • Residency or Internship will qualify you for a student loan forbearance. There may be resources for other medical professionals as well, such as registered nurses.

Note that there can be some exceptions made in certain cases. For example, the federal government will not pay your interest if you enter into a forbearance agreement and if you have unsubsidized loans, such as PLUS.

You need to apply for either deferment or forbearance before you miss your payments. If you start to skip your monthly payments, or if are defaulted on, this more than likely will prevent you from entering into these programs. Therefore it is always worthwhile to apply for the programs as soon as possible.

How to apply for Deferment or Forbearance Programs

The process can be complicated, not only for the current programs in place but there are also new rules as well as regulations that are constantly being implemented. Many students have questions on what will or won’t qualify them for these student loan deferment programs. Or they may want to explore any other assistance programs that may be available to them so that they can pay down their debts in as short of timeframe as possible.

If the college graduate does have a limited income, or is under excessive debt, then they can get free advice from non-profit credit counseling agencies. Counselors from these organizations can not only review all of the student loan deferment as well as forbearance options that are out there, but they also go over other resources that may be able to provide the borrower more time to pay off their bills. Find a listing non-profit debt relief companies.





Or the applicant can also apply on their own or request more details. To learn more or apply for either of these resources, you need to call your servicer or talk to your college’s financial aid office. Or feel free to contact the US Department of Education, and the general phone number is 1-800-872-5327. Contacting any one of these organizations regarding a forbearance or deference will provide applicants with a significant amount of information on the process.

By Jon McNamara

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