Deferment

A deferment is the temporary postponement of payments on your student loan.  Your servicer can advise you on your eligibility for deferment.

Primary reasons and time considerations for deferment include:

• Returning to school at least half-time (unlimited periods);
• Unemployment (six-month period with a maximum of six periods);
• Economic hardship (12-month period with a maximum of three periods); or
• Being on active duty (including National Guard duty) during war, national emergency or military operation.

Deferments are not automatic; you must apply for one and receive approval from your lender.

When subsidized loans are deferred, the principal payments are postponed and the interest is billed to the federal government.

When unsubsidized loans are deferred, the principal payments are postponed but you are responsible for paying the accrued interest.

forbearance

Forbearance is the temporary cessation or reduction of principal payments on your student loan.  You are still responsible for all accrued interest during the forbearance period.

If you do not qualify for a deferment but are having a hard time repaying your student loan, you may be eligible for forbearance.

Common reasons for forbearance include:

• Poor health;
• A rigorous residency program; or
• Financial hardship.

Forbearance is allowed at the discretion of the lender and often results in an extended repayment period.