Student Loan Deferment & Forbearance


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Deferment & Forbearance

I can't pay my student loans

As the price of college rises out of control and student loan debt is at it's highest levels ever, many students are finding themselves unable to keep up with their student loan payments. While student loan consolidation may help some, when your job doesn't pay enough to live on, or worse, you can't find a job, then stronger measures are needed. It's time to check out student loan deferment or forbearance for possible assistance.

Deferment

If you are unemployed, back in school or facing financial hardship, you may be eligible for deferment, which will allow you to stop making payments for a specified period of time. If you have a subsidized Federal loan, you won't have to pay interest while the deferment is in place. If you have an unsubsidized Stafford Loan, you will be responsible for the interest payments while in deferment. If you fail to pay the interest, it will get added into your loan amount (capitalized) and you will owe a higher amount when payments begin again. You need to apply for deferment through your loan servicer and you also must continue to make payments on your loans until notified that the deferment has been approved.

Military personnel, including National Guardsmen, called to active duty may qualify for deferment while serving. Those who fall under the definition of economic hardship, may be able to defer payment for up to three years.

Forbearance

Borrowers who do not qualify for student loan deferment may be able to qualify for forbearance. This is a temporary halt or reduction of payments due to financial hardship conditions. Your borrower may be able to grant forbearance for up to twelve months at a time for a total of three years. Interest continues to accrue even on subsidized loans and you are responsible for paying it. As with deferment, you must apply to your loan servicer for forbearance and you must continue to make loan payments until you have been notified of approval.

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