How to Get Deferred Student Loans: A Comprehensive Guide

Deferring your student loans can be a lifeline when facing financial hardship. It’s essentially a temporary pause on your loan payments, giving you breathing room to get back on your feet. Getting approved isn’t automatic, but understanding the process and eligibility requirements significantly increases your chances. The primary way to get your student loans deferred involves submitting an application to your loan servicer, demonstrating that you meet one of the qualifying deferment conditions outlined by the Department of Education or your private lender. This application will require specific documentation to support your claim, such as proof of enrollment in school, unemployment verification, or evidence of economic hardship.

Understanding Student Loan Deferment

Deferment is a powerful tool, but it’s not a magic bullet. It’s a temporary suspension of your obligation to repay your loans, typically lasting up to three years. During this period, interest may still accrue on your loans, which, depending on the type of loan, can either be capitalized (added to your principal balance) or not. This is crucial to understand as it directly impacts the total amount you’ll ultimately repay.

Eligibility: The Key to Deferment

The key to successfully obtaining a deferment lies in demonstrating your eligibility. The specific qualifying conditions vary depending on the type of loan you have – federal or private. Common reasons for deferment include:

• Enrollment in school: Being enrolled at least half-time at an eligible school.
• Unemployment: Actively seeking but unable to find full-time employment.
• Economic Hardship: Facing significant financial difficulties, such as a low income or high medical expenses.
• Active Duty Military Service: Serving on active duty in the military.
• Rehabilitation Training Programs: Participating in an approved rehabilitation training program for individuals with disabilities.
• Parental Leave: Some loan types allow deferment for parents who are newly responsible for a child.

The Deferment Application Process: Step-by-Step

1. Identify Your Loan Servicer: The first step is knowing who services your loan. This information can be found on your credit report or through the National Student Loan Data System (NSLDS) for federal loans.
2. Determine Your Eligibility: Review the eligibility criteria for deferment based on your loan type and current circumstances. Carefully assess if you meet the specific requirements.
3. Gather Required Documentation: This is where meticulousness pays off. Collect all necessary documents to support your application. This could include enrollment verification from your school, unemployment compensation stubs, tax returns demonstrating low income, or military orders.
4. Complete the Deferment Application: Obtain the deferment application form from your loan servicer’s website or by contacting them directly. Fill it out accurately and completely, ensuring you understand each section and provide all requested information.
5. Submit Your Application and Documentation: Submit the completed application and supporting documentation to your loan servicer according to their instructions. Keep copies of everything you submit for your records.
6. Follow Up: Don’t assume your application is automatically approved. Follow up with your loan servicer to confirm they received your application and to inquire about its status. This proactive approach can prevent delays and ensure your application is processed efficiently.
7. Continue Making Payments (Until Approved): Crucially, continue making loan payments until you receive official notification that your deferment has been approved. Failure to do so could result in delinquency and negatively impact your credit score.

Federal vs. Private Loan Deferment

The deferment options available differ significantly between federal and private student loans. Federal student loans generally offer more generous and standardized deferment options, often with specific categories like economic hardship or unemployment. Private student loans, on the other hand, have varying deferment policies that are determined by the lender. These policies may be less flexible and have stricter eligibility requirements. Always check the terms and conditions of your private loan agreement to understand your deferment options.

Frequently Asked Questions (FAQs) About Student Loan Deferment

Here are some common questions regarding student loan deferment:

1. What’s the difference between deferment and forbearance?

Deferment is a temporary postponement of loan payments typically granted due to specific circumstances like enrollment in school or unemployment. Interest may or may not accrue depending on the type of loan. Forbearance is another form of temporary postponement, usually granted due to financial difficulties or other hardship. However, interest always accrues during forbearance, regardless of the loan type, and is often capitalized.

2. How long can a student loan be deferred?

The maximum deferment period is generally three years, although specific types of deferment may have shorter limits. For example, certain military deferments may be longer.

3. Does interest accrue during deferment?

Whether interest accrues depends on the type of loan and the reason for deferment. For subsidized federal loans, interest does not accrue during deferment related to enrollment or economic hardship. However, for unsubsidized federal loans and private loans, interest typically accrues during deferment and is often capitalized when repayment resumes.

4. What happens when my deferment period ends?

When the deferment period ends, your loan payments will resume according to your original repayment schedule (or a modified repayment schedule if you have made arrangements with your servicer). It’s crucial to contact your loan servicer before the deferment ends to discuss your repayment options and ensure a smooth transition back into repayment.

5. Can I get a deferment if I’m in default on my student loans?

Generally, you cannot obtain a deferment if your loans are already in default. You must first rehabilitate your loans or consolidate them out of default before becoming eligible for deferment.

6. What documentation do I need to apply for deferment?

The required documentation varies depending on the type of deferment you are seeking. Common documents include:

• Enrollment Verification: From your school registrar.
• Unemployment Verification: From your state unemployment agency.
• Tax Returns: To demonstrate low income.
• Military Orders: For active duty military deferment.
• Pay Stubs: Showing current income.

7. How long does it take to get a deferment approved?

The processing time for deferment applications varies depending on the loan servicer and the complexity of your situation. Generally, it can take several weeks to a few months for your application to be reviewed and approved. Follow up with your servicer to check on the status.

8. Can I apply for deferment online?

Yes, many loan servicers offer online applications for deferment. Check your servicer’s website for the necessary forms and instructions. Submitting your application online can often expedite the process.

9. What if my deferment application is denied?

If your deferment application is denied, carefully review the reason for the denial. You may be able to appeal the decision by providing additional documentation or addressing any issues identified in the denial letter. Alternatively, explore other repayment options, such as income-driven repayment plans or forbearance.

10. Will deferment affect my credit score?

Deferment itself does not directly affect your credit score, as long as you obtain the deferment before you become delinquent on your loan payments. However, if you fall behind on your payments before obtaining a deferment, it will negatively impact your credit.

11. Can I get a deferment for private student loans?

Yes, you may be able to get a deferment for private student loans, but the terms and conditions will vary depending on the lender. Review your loan agreement and contact your lender to understand your options. Private lenders often have less flexible deferment policies than the federal government.

12. What’s the difference between a subsidized and unsubsidized loan in terms of deferment?

The key difference during deferment is interest accrual. With a subsidized federal loan, the government pays the interest that accrues during certain deferment periods (like in-school deferment or economic hardship deferment). With an unsubsidized federal loan, interest accrues during all deferment periods, and this accrued interest may be capitalized when you enter repayment, increasing your loan balance.