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Deferment & Forbearance

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Deferment and Forbearance

If you are having trouble repaying your federal student loans, you should try to avoid default by attempting to work out an affordable repayment plan with your loan servicer. Your options might include:

  • Changing your repayment plan
  • Obtaining a deferment
  • Obtaining a forbearance
  • Loan consolidation

Both deferment and forbearance allow you to delay making your federal student loan payments. Generally, you will be granted a deferment if you apply for one and meet the required criteria, while some types of forbearance are allowed only at the discretion of your lender.

Loan Deferment

If you are unemployed, facing economic hardship, or in another approved circumstance, loan deferment allows you to delay repayment. You do not need to make loan payments during a period of deferment. The reason for the deferment will generally dictate how long it lasts.

Important Notes:

  • The Government May Pay Interest that Accrues On Subsidized Loans During Your Deferment such as Federal Perkins Loans, Direct Subsidized Loans, and FFEL Subsidized Federal Stafford Loans.
  • Increased Cost for Some Loans. You are responsible for repaying the interest that accrues on Unsubsidized Direct and FFEL loans and PLUS loans during deferment. If you do not pay the interest during the deferment period, it will be added to the principal amount that you owe. This is called interest capitalization. After the deferment, your loan interest will be calculated based on the new principal amount.
  • Keep Paying. If possible, you should make your required student loan payments while you are waiting to hear whether you have been granted a deferment. If you stop making payments and your request is denied, you could default on your loan(s).
  • Already in Default? If your loan is in default you may be eligible for a deferment if you have made payment arrangements satisfactory to the Department of Education.

If you are interested in learning whether a deferment is a good option for you, please visit StudentAid.gov or contact your lender or servicer for further information.

Forbearance

Forbearance allows you to stop or reduce your monthly student loan payments for up to one year. This time period can be extended upon your request if you continue to meet the forbearance requirements. Some types of forbearance are mandatory, meaning that your lender must grant you the forbearance if you meet certain requirements, while other types of forbearance are discretionary, meaning that the lender can choose whether to grant you the forbearance.

Considerations:

  • Increased Cost for ALL Loans: You are responsible for repaying the interest that accrues on any federal student loan during forbearance, even Subsidized Direct and FFEL loans. If you do not pay the interest during the forbearance period, it will be added to the principal amount that you owe. This is called interest capitalization. After the forbearance, your loan interest will be calculated based on the new principal amount.
  • Keep Paying: If possible, you should make your required student loan payments while you are waiting to hear whether your forbearance is granted. If you stop making payments and your request is denied, you could default on your loan(s).

If you are interested in learning whether forbearance is a good option for you, please visit StudentAid.gov or contact your lender or servicer for further information.