How to Apply for a Student Loan Deferment

Student loan deferment offers a temporary suspension of student loan payments, providing relief during periods when borrowers face financial challenges or other specific qualifying events. This mechanism allows individuals to temporarily pause their obligation to make monthly payments on both the principal and interest of their student loans. It serves as a tool to help manage financial obligations and prevent delinquency or default when circumstances make regular payments difficult.

Determining Your Eligibility

Eligibility for student loan deferment largely depends on the type of loan you possess and your current circumstances. Federal student loans, such as Direct Loans, Perkins Loans, and Federal Family Education Loan (FFEL) Program loans, typically offer standardized deferment options overseen by the U.S. Department of Education. Private student loans, however, are governed by individual lenders, and their deferment policies can vary significantly, often being less flexible than federal programs. It is important to contact your specific loan servicer to understand the deferment options available for your private loans.

A fundamental requirement for federal loan deferment is that your loan must not be in default. While deferment can help prevent a loan from entering default, most deferment types are not available once a loan has already defaulted. Understanding your specific loan type, such as Stafford, Perkins, or PLUS loans, is also important, as the available deferment options can differ. You can check your current loan status and identify your loan servicer through the Federal Student Aid website, which provides a centralized portal for managing federal student aid information.

Your loan servicer acts as the primary point of contact for all deferment inquiries and applications. They are responsible for providing the necessary forms and guiding you through the eligibility determination process. General requirements for federal deferments often include experiencing a qualifying event, such as enrollment in school, unemployment, economic hardship, or active military service. Ensuring your loan information is accurate and accessible through official channels streamlines the process of assessing your eligibility.

Understanding Deferment Categories

Federal student loan deferment is available under several specific categories, each with distinct qualifying conditions and implications for interest accrual.

In-School Deferment

In-School Deferment is common for borrowers enrolled at least half-time at an eligible educational institution. This deferment typically lasts as long as the borrower maintains half-time enrollment and often includes a grace period after enrollment ceases. For subsidized federal loans, interest does not accrue during this deferment period; however, for unsubsidized loans, interest continues to accrue. Proof of enrollment, such as an enrollment certificate from your school, is typically required.

Unemployment Deferment

Unemployment Deferment is available for borrowers who are actively seeking but unable to find full-time employment, or who are working less than 30 hours per week and are registered with an employment agency. This deferment can be granted for up to three years. During this period, interest continues to accrue on unsubsidized loans, while it does not accrue on subsidized loans. Documentation may include unemployment benefit statements or a signed statement confirming active job searching.

Economic Hardship Deferment

Economic Hardship Deferment provides relief for borrowers experiencing significant financial difficulty. This category is generally available for up to three years. Eligibility is often determined by factors such as receiving means-tested public assistance, having income below 150% of the poverty guideline for your family size, or having a monthly student loan payment that exceeds 20% of your discretionary income. Interest does not accrue on subsidized loans, but it does on unsubsidized loans. Required documentation often includes proof of public assistance or income verification.

Military Service Deferment

Military Service Deferment is available for active duty service members during a war, military operation, or national emergency, as well as for up to 13 months following the conclusion of active duty. This deferment supports service members by pausing their payment obligations. Interest does not accrue on subsidized loans during this period, but it does on unsubsidized loans. Official military orders or a letter from a commanding officer may be required.

Other less common deferment types include Graduate Fellowship Deferment and Rehabilitation Training Deferment, each with specific criteria and documentation requirements.

Applying for Deferment

The process of applying for student loan deferment begins by contacting your loan servicer. Your servicer is the entity that manages your loan account and can provide the specific application forms relevant to your situation. It is important to request the correct form for the deferment type you believe you qualify for, as different deferment categories have unique application requirements. You must continue making payments until your deferment application is officially approved and you receive notification from your servicer.

Once you receive the application form, carefully complete all sections, ensuring that the information provided is accurate and matches your supporting documentation. While the form itself may be straightforward, attaching all necessary proof of eligibility is critical for a successful application. This documentation, such as enrollment verification, unemployment statements, or military orders, validates your claim for deferment. It is advisable to make copies of the completed application form and all supporting documents for your personal records before submission.

Applications and supporting documentation can typically be submitted to your loan servicer via mail, fax, or sometimes through their online portal. The specific submission methods will be outlined in the application instructions or on your servicer’s website. Timely submission is important to avoid any lapse in payments or potential late fees. If your application is denied, or if your servicer requests additional information, promptly respond with the requested details or seek clarification on the reasons for denial. Understanding the reason for denial is the first step in addressing any issues or exploring alternative options.

What Happens During and After Deferment

Once a student loan deferment is granted, your obligation to make monthly payments is temporarily paused. During this period, payments are not required, providing a temporary reprieve from financial obligations. A key consideration during deferment is how interest accrues. For subsidized federal loans, the U.S. Department of Education pays the interest that accrues during the deferment period, meaning your loan balance will not increase due to interest.

However, for unsubsidized federal loans, interest continues to accrue during deferment. If this accrued interest is not paid during the deferment period, it will be capitalized, meaning it is added to your principal balance when the deferment ends. This can increase your total loan amount and the overall cost of the loan. Generally, deferment periods do not count toward the required payment periods for loan forgiveness programs, such as Public Service Loan Forgiveness (PSLF), unless specific, limited conditions are met.

As your deferment period nears its end, your loan servicer will typically notify you, usually a few weeks or months in advance, that your payments are scheduled to resume. This notification will include information about your new payment amount and the upcoming due date. While a grace period is common after leaving school, there is generally no additional grace period immediately following the end of a deferment; payments are expected to resume promptly. It is important to understand your new payment schedule and budget accordingly. If you find yourself still unable to make payments after deferment ends, you should promptly contact your loan servicer to discuss other options, such as enrolling in an income-driven repayment plan or applying for forbearance.