How to Get Student Loans Out of Deferment
Learn how to proactively end your student loan deferment and strategically prepare for repayment. Take control of your loans.
Student loan deferment offers a temporary pause on federal student loan payments, providing relief when borrowers face financial challenges. This option allows individuals to temporarily suspend payments on their loan principal and, in some cases, interest, without the risk of defaulting. Understanding how deferment works and how to end it voluntarily is key to managing student loan debt.
Understanding Your Deferment Status
Deferment temporarily suspends student loan payments, differing from forbearance primarily in how interest accrues. During deferment, interest typically does not accrue on subsidized federal student loans or Perkins Loans. However, interest generally accrues on all loan types during forbearance, and on unsubsidized federal loans during deferment, which can lead to a larger total amount owed.
To ascertain your current deferment status, log into your account on StudentAid.gov using your FSA ID, where loan details are available. Alternatively, contact your federal student loan servicer directly to confirm your status and understand the terms. Common circumstances that may qualify for deferment include being enrolled in school at least half-time, unemployment, economic hardship, military service, or undergoing cancer treatment. While some deferments, like in-school deferment, may be automatic if enrollment is reported, others require a formal application.
Voluntarily Ending Deferment
To voluntarily conclude a student loan deferment, contact your federal student loan servicer directly. The servicer manages your loan account and can initiate the cessation of the deferment period. Clearly state your intention to end the deferment early and resume regular payments.
When contacting your loan servicer, provide identifying information such as your full name, Social Security number, date of birth, and loan account number. Explicitly request the termination of your current deferment and inquire about your first payment due date. Servicers may require a written request or a specific form to process an early termination; submit any required documentation promptly to avoid delays.
The timeline for processing an early deferment termination request can vary, but servicers process these requests within a reasonable timeframe. Once processed, the servicer will confirm your new payment due date and amount. Maintain a record of all communications, including dates, names of representatives, and any confirmation numbers, to ensure a smooth transition back into repayment.
Preparing for Repayment After Deferment
As a student loan deferment concludes, borrowers transition back into active repayment. For unsubsidized loans, any interest accrued during deferment will be capitalized, added to the principal balance, increasing the total amount on which future interest is calculated. Your loan servicer will communicate your new monthly payment amount and exact due date.
Borrowers have several federal student loan repayment options. The Standard Repayment Plan typically involves fixed monthly payments over a 10-year period, resulting in the lowest total interest paid over the loan’s life. Income-Driven Repayment (IDR) plans, such as Income-Based Repayment (IBR), Pay As You Earn (PAYE), and Saving on a Valuable Education (SAVE), adjust monthly payments based on your income and family size, potentially lowering payments to as little as $0 per month. While IDR plans offer lower monthly payments, they often extend the repayment period, which may lead to paying more interest over time, though remaining balances can be forgiven after 20 or 25 years of qualifying payments.
Setting up auto-pay ensures consistent, on-time payments and can lead to a slight interest rate reduction, typically 0.25%, offered by many federal and private lenders. Auto-pay simplifies the payment process and helps build a positive payment history, a significant factor in credit scoring. Regularly reviewing billing statements from your servicer is important to verify payment accuracy and track your loan balance. Create a detailed budget that incorporates your student loan payments, assessing your monthly income and expenses to ensure payments are manageable.