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Consider Deferment and Forbearance

If you anticipate having temporary problems with repayment, there are two standard repayment support options you can use to reduce or eliminate your payments for a specific period of time:

• Deferment – Deferment allows you to completely postpone your student loan payments if you meet Economic Hardship, Education Related, Military/Post Active Duty, Unemployment, or In-School conditions.  Details on eligibility are available through the SafeStart Financial Literacy program, as well as at FinAid!, from your loan servicer(s), or from the Department of Education.  The benefit of deferment is that interest does not accrue for any subsidized federal loans you have.  This postponement is often provided in 1-year increments.
• Forbearance – Forbearance allows you to reduce or suspend your student loan payments if you are willing but unable to make your student loan payments because of financial hardship.  This reduction or suspension can last for up to 3 years and is often provided in 3-month or 1-year increments.  Current qualifying conditions for forbearance include participation in Americorps or an internship or residency program, high loan debt burden, or preliminary qualification for teacher loan forgiveness.  The Department of Education and FinAid! both have good write-ups on forbearance.
  • It is important to remember that during forbearance, loans that were previously interest free (such as the Subsidized Stafford) now accrue interest for which the borrower is ultimately responsible.

Contact your servicer if you wish to apply for either deferment or forbearance, and make sure to continue making on-time payments while your application goes through.

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