Deferment - When you Have to Postpone Student Loan Repayment

Under certain circumstances, you can receive periods of deferment or forbearance that allow you to postpone loan repayment. These periods do not count toward the length of time you have to repay your loan. You can’t get a deferment or forbearance for a loan that is already in default.

A deferment is a period of time during which no payments are required and interest will not accumulate, unless you have an unsubsidized Stafford Loan. In that case, you must pay the interest. To qualify for a deferment, you must meet specific eligibility requirements.

The most common loan deferment conditions are

enrollment in school at least half-time
inability to find full-time employment (for up to three years)
economic hardship (for up to three years)

An active duty military deferment is available for loans first disbursed on or after July 1, 2001. The deferment may not exceed three years and is only available for periods when the borrower is serving active duty during a war or other military operation, or a national emergency or is performing qualifying National Guard duty under the same circumstances.

Not all active duty military personnel are eligible for this deferment.

If you temporarily can not meet your repayment schedule but are not eligible for a deferment, your lender may grant you forbearance for a limited, specific period of time.

Forbearance occurs when your lender or loan-servicing agency agrees to either temporarily reduce or postpone your student loan payments. Interest continues to accumulate and you are responsible for paying it, no matter what kind of loan you have.

Generally, your lender can grant forbearance for periods up to 12 months at a time, for a maximum period of three years. You’ll have to provide documentation to the lender to show why you should be granted forbearance. The lender must send you a notice confirming the terms that were agreed to and record them in your file.