How to Defer Student Loans

Student loan deferments give you the opportunity to suspend your student loan payments temporarily when you aren't in a position to pay the minimum amount due each month. All student loan borrowers have the right to defer their payments at least once during the period of repayment, but they must meet the specified criteria to do so.

Difficulty: Moderately Easy

Instructions

Things You'll Need:

• Lender's information, including phone number and web address
• Deferment form

1. Determine whether you are eligible to defer your student loans. There are 14 types of deferments available, but those that are available to you will depend on when your student loans were borrowed.
   
   

   Borrowers of loans that originated after July 1, 1993 are eligible for deferment if they are returning to school at least half time, are unemployed, are experiencing financial hardship, are participating in a graduate fellowship or are enrolled in rehabilitation training.

2. Understand how long the deferment will remain effective and the specific eligibility requirements for your deferment. For example, to be eligible for a student deferment, you must be enrolled at least half time at an eligible institution and you must have the school certify your enrollment. Unlike other deferment options, there is no time limit when you defer your student loans to go back to school. You'll remain qualified until you graduate or drop below half-time status.

3. Contact the lender of your student loans to submit your deferment request. Depending on the lender, you may be able to file the paperwork online via their website. In addition to the application, make sure you provide proper documentation that supports the need to defer your loan payments, whether it be proof of financial hardship or enrollment in school.

4. Give your lender two weeks to process your deferment request. If you haven't received confirmation that your request has been approved, call a loan representative and check on the status. This will help hasten the process if there is a problem granting your deferment because additional documentation is needed.

5. Decide whether you want to continue paying the loan's interest each month, or have the interest capitalized and added onto the principal of the loan. The latter option will cost you more money, because the interest payments will get higher as the loan's balance increases. Review your current financial situation and determine which option makes the most sense for you.

6. Keep copies of all the documentation related to your student loan deferment, even after your deferment period ends. If there is a discrepancy between yourself and the loan provider, you'll be able to see easily what the original agreement stated.

Tips & Warnings

• Whether you have to pay interest while you defer your student loans depends on the type of loans you have. The interest for subsidized loans is paid by the federal government, but you will be responsible for all interest payments on unsubsidized Stafford loans.
• If you would like to defer your loan payments, but don't meet any of the qualifications for deferment, you may be able to request a forbearance. Forbearances are given at the discretion of your loan provider and are dependent on each borrower's unique circumstances.

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