What is Loan Deferment?

A deferment is an approved period during which you are not required to make payments on your principal federal student loans. Crucially, for certain types of federal loans (primarily subsidized loans), the government may also pay the interest that accrues during the deferment period. For unsubsidized loans, interest will continue to accrue and will be capitalized (added to your principal balance) if not paid during the deferment.

Key Eligibility Categories

Eligibility for deferment is not automatic; you must apply through your loan servicer and meet specific criteria. The most common eligibility categories include:

1. In-School Deferment
You are enrolled at least half-time at an eligible college or career school. This is often automatically applied when your school reports your enrollment status.

2. Unemployment or Economic Hardship Deferment
You may qualify if you are actively seeking but unable to find full-time employment (eligible for up to 36 months cumulative). Economic hardship deferment is available if you receive certain federal benefits (like Supplemental Nutrition Assistance Program or Supplemental Security Income), serve in the Peace Corps, or your monthly income falls below 150% of the poverty guideline for your family size and state.

3. Graduate Fellowship Deferment
You are enrolled in an approved graduate fellowship program.

4. Military Service and Post-Active Duty Deferment
You are serving on active duty during a war, military operation, or national emergency, or for up to 13 months following the conclusion of such service or until you return to enrolled student status.

5. Cancer Treatment Deferment
You are undergoing treatment for cancer. This deferment can last for the duration of your treatment plus an additional six months.

6. Parent PLUS Borrower Deferment
If you are a parent borrower of a PLUS loan, you may defer while the student for whom you borrowed is enrolled at least half-time and for an additional six months after they drop below half-time enrollment.

How to Apply for Deferment

Identify who manages your federal loans via your Federal Student Aid (FSA) account at StudentAid.gov.

Your servicer will provide the necessary deferment request form (e.g., the Unemployment Deferment Request, Economic Hardship Deferment Request).

Be prepared to submit proof that supports your eligibility claim, such as documentation of unemployment benefits, enrollment verification, or military orders.

Do not stop making payments until your servicer officially approves your deferment request in writing. You are responsible for payments until the deferment is granted.

Important Considerations

* Interest Implications: Know whether your loans are subsidized or unsubsidized. Paying accruing interest on unsubsidized loans during deferment can save you money in the long run.
* Time Limits: Most deferments have cumulative maximum time limits (often 36 months per eligibility type). Track your usage.
* Forbearance as an Alternative: If you do not qualify for deferment but still need payment relief, you may request a general or mandatory forbearance. Interest accrues on all loans during forbearance.
* Loan Forgiveness Programs: Deferment periods typically do not count toward the required number of payments for income-driven repayment (IDR) forgiveness or Public Service Loan Forgiveness (PSLF).

Conclusion

Federal loan deferment is a powerful tool designed to help borrowers manage their obligations during difficult times. By thoroughly understanding the eligibility requirements and application process, you can make an informed decision about whether deferment is the right strategy for your financial situation. Always communicate proactively with your loan servicer, keep detailed records, and explore all available options for managing your federal student debt.

Disclaimer: This article is for informational purposes only. Loan policies are subject to change. For the most current information and personalized advice, always consult your loan servicer and the official U.S. Department of Education website at StudentAid.gov.

What is Loan Deferment?

Deferment is an approved period during which a borrower is not required to make principal payments on their federal student loans. A key feature is that for subsidized federal loans (like Direct Subsidized Loans and Subsidized Federal Stafford Loans), the U.S. Department of Education pays the interest that accrues during the deferment period. For unsubsidized loans, interest will continue to accrue and will be capitalized (added to the principal balance) if not paid during the deferment.

Primary Eligibility Categories

Eligibility for deferment is not automatic; you must apply through your loan servicer and provide necessary documentation. Common eligibility categories include:

1. In-School Deferment
You are eligible if you are enrolled at least half-time at an eligible college or career school. This typically applies to both undergraduate and graduate studies.

2. Unemployment or Economic Hardship Deferment
You may qualify if you are seeking but unable to find full-time employment (for up to three years), or are experiencing significant economic hardship as defined by federal regulations. This can include receiving federal or state public assistance, working full-time but earning a low income, or serving in the Peace Corps.

3. Graduate Fellowship Deferment
Available for borrowers engaged in a qualifying graduate fellowship program or approved rehabilitation training program for individuals with disabilities.

4. Military Service and Post-Active Duty Deferment
This covers borrowers on active duty military service, as well as those in the 13-month period following the conclusion of active duty or demobilization.

5. Cancer Treatment Deferment
A relatively new category, this defers payments for borrowers undergoing active treatment for cancer.

6. Parent PLUS Borrower Deferment
Parents who have taken out Direct PLUS Loans for a dependent student may qualify for deferment while the student is enrolled at least half-time and for an additional six months after the student drops below half-time enrollment.

How to Apply for Deferment

Your federal loan servicer manages your loans and processes deferment requests. You can find your servicer’s information on your billing statement or in your account on [StudentAid.gov](https://studentaid.gov).

Your servicer will provide the necessary deferment request form. You must select the correct deferment type (e.g., Unemployment Deferment Request, In-School Deferment Request).

Depending on the deferment type, you may need to provide documentation such as enrollment verification from your school, proof of unemployment benefits, or a statement from your military commander.

Do not stop making payments until your servicer has confirmed in writing that your deferment has been approved. If you stop payments prematurely, you risk falling into delinquency or default.

Deferment vs.

Forbearance

It is crucial to distinguish deferment from forbearance. While both allow temporary payment postponement, interest accrues on all loan types (subsidized and unsubsidized) during forbearance. Forbearance is often used when a borrower does not qualify for a deferment but still needs temporary relief.

Key Considerations

* Impact on Forgiveness Programs: Months spent in deferment generally do not count toward qualifying payments for income-driven repayment (IDR) forgiveness or Public Service Loan Forgiveness (PSLF), with specific exceptions (e.g., certain military deferments).
* Interest on Unsubsidized Loans: If you have unsubsidized loans, consider making interest-only payments during deferment to prevent your loan balance from growing.
* Time Limits: Most deferments have cumulative time limits (e.g., three years for economic hardship). Keep track of your usage.

Conclusion

Federal loan deferment is a vital protection for borrowers facing temporary obstacles to repayment. By understanding the eligibility criteria and application process, you can proactively manage your student debt and avoid the severe consequences of default. Always communicate with your loan servicer to explore the best option for your specific financial situation, and ensure you have official approval before altering your payment schedule.

Disclaimer: This article is for informational purposes only. Federal student aid policies are subject to change. For the most current information and personalized advice, always consult your loan servicer and the official U.S. Department of Education resources at [StudentAid.gov](https://studentaid.gov).

For many people, a hardship loan modification can mean the difference between keeping their home or losing it to foreclosure. But what is a mortgage loan modification? It is a revision of the terms of current loan that make your loan affordable, so that the homeowner is able to make the payments.

The federal government has provided a way for persons facing foreclosure and imminent hardship to apply for a federal loan modification. If you are a person that has been making payments and has been affected by the conditions of the economy, you may qualify for one of these loan modifications.

The two biggest options that the government offers is a mortgage modification that allows a person to add missed payments to the end of the loan, but you will be expected to prove financial viability. You will have to be able to explain what has changed that will allow you to make on-time payments that was different in the past. The modification will help make your loans more affordable, but the lender is going to want to be assured that there is no danger of future default.

A government back mortgage loan refinance is also an option if you have a Fannie Mae or Freddie Mac mortgage. The government is trying to instill confidence in the mortgage lender and restore strength to those to guarantors. So, they are allowing homeowners that meet certain criteria to refinance their existing mortgages through the government’s loan refinance program.

This program offers a mortgage refinance to a low fixed interest rate. In order to apply for this assistance, you will need to fill out the same type of paperwork required for a mortgage. This paperwork will include employment and financial information. But more importantly, you will be expected to explain the reason for your hardship and how you are planning on meeting the terms of your loan modification agreement.

Your current lender and the federal government website is the best resource for getting information on applying for a government loan modification that may keep your home out of foreclosure. It is wise to being researching your options at the first indication of financial distress. You will have more choices available early rather than later. Many people make the mistake of thinking they can get caught up on payments on their own, but that is rarely the case and by the time they realize it too much time has passed.