There are a number of circumstances under which it is possible to defer payments on money borrowed through federal student loan programs. With an approved deferment, you can temporarily put off making payments without penalties and - depending on your specific loan type - you may not have to pay interest during a deferment period. You must apply for a deferment in order to get one.
Qualifying Circumstances
Before applying for a deferment, you'll first need to consider if the reason you need a break from making payments on your student loan is one that qualifies for this type of postponement. There are a number of situations under which federal student loans can be deferred.
Deferments for most student loans- including Direct, Federal Family Education Loan (FFEL) and Perkins loans - may be possible when you are:
- Enrolled half-time or more in a college or career school
- Enrolled in a graduate fellowship program
- Enrolled in rehabilitation-related course of study related to a disability
- Unemployed
- Unable to secure full-time employment
- Experiencing economic hardship
- Serving in the Peace Corp
- Deployed on active military duty
- Recently returned from qualifying active duty military service
Additionally, for Perkins loans only, you may also be eligible for a deferment when engaged in service that, when completed, will result in the cancellation or discharge of the loan. Examples of such service include working as a firefighter, law enforcement officer, Head Start educator and many other situations.
For Parent PLUS loans, deferments are possible when the student on whose behalf you borrowed the money:
- Is enrolled in school half time or more
- Has graduated from school within the past six months
- Has reduced school enrollment to less than half time within the past six months
Application Process
Do not assume that a deferment will be put into place simply because you find yourself in a qualifying situation. You must apply for a deferment in order to be considered, and this is something that you should do before you become delinquent on a payment.
Where to Apply
Deferment applications must be submitted to the organization that services your loan, which is the company to which you make student loan payments.
- Your loan servicer is listed on the documentation you received regarding loan repayment, and you can also find this information by logging in to your official Federal Student Aid account.
- For Perkins loans, if you are unsure of who your servicer is, you will need to start by contacting the financial aid department of the school through which the loan was issued, as the school may be handling this function in-house. The financial aid representative can let you know if this is the case, or if your loan has been assigned elsewhere for servicing.
Submitting Your Application
Paperwork requirements may vary somewhat from one provider to another, though in every case you'll be required to submit documentation in support of why you believe you qualify to be considered for a deferment.
Once you are ready to submit your application, contact your loan servicer for access to the documentation you need to fill out. Use only the paperwork provided directly by your lender and follower their instructions precisely.
You can see a sample deferment request form on Student Loan Borrower Assistance.org to get an idea of what to expect, but you'll need to complete the actual application form provided and required by your own loan servicer in order to apply.
Note that there is never a fee to apply for a deferment. Requests for these types of payments are scams. If you come across one, stop what you are doing and contact your loan service provider directly.
Keep Paying During the Application Process
The deferment processing time varies by lender and can be impacted by a number of variables. You can generally expect a decision within 30 to 60 days, but for a better estimate you should ask your lender how long you should expect to have to wait for a decision.
It is very important that you continue to make payments on your student loan while you are going through the process of applying for your deferment. Failure to make payments until you are certain a deferment has been approved will result in delinquency and, eventually, default.
Interest During a Deferment
Interest is handled differently for different loan types during approved deferments.
Subsidized Loans
If you are approved for a deferment, interest will not accrue on any Direct Subsidized loans that you have. The government pays interest on your behalf on these types of loans between the time you borrow the money while you are in school and when the loan goes into repayment, as well as during periods of deferment - that is what 'subsidized' means in this case.
Unsubsidized Loans
Any other federal student loans you have (such as Direct Unsubsidized Loans, FFEL Unsubsidized Loans and Parent PLUS loans) are unsubsidized. With these loans, interest will continue to accrue during deferment periods. You can opt to make interest-only payments during the deferment. If you do not do this, accrued interest will be capitalized and added to your balance when your deferment ends.
Forbearance Alternative
If your situation does not meet the requirements for a deferment, you may be able to qualify for a forbearance. With this option, you may be granted a temporary reduction or break in payments, though interest will continue to accrue on all loan types while a forbearance is in place. This is much better than simply ceasing to pay your loan, as doing that could lead to a default.
