As a student loan borrower, you may have heard of student loan deferment. It’s a helpful option for those who are struggling to make payments on their student loans. But what exactly is deferment? How does it work? And is it right for you? In this article, we’ll explore everything you need to know about student loan deferment, including the eligibility requirements, types of deferment, and how to apply for deferment.
Table of Contents
What is Student Loan Deferment?
Student loan deferment is a temporary pause in your student loan payments. During deferment, you are not required to make payments on your loans, and interest may not accrue on certain types of loans. Deferment is typically granted for specific reasons, such as returning to school, unemployment, or economic hardship.
For any business enquiry, you can contact us at ArabsGeek.com
For more of such financial articles, Consider visiting our sister website at EntrepreneursPilot.com
Eligibility for Student Loan Deferment
To be eligible for student loan deferment, you must meet certain criteria. The requirements vary depending on the type of deferment you are seeking. In general, you must be enrolled in an eligible school, working toward a degree or certificate, or experiencing economic hardship.
Types of Student Loan Deferment
There are several types of student loan deferment, each with its own eligibility criteria and requirements. The most common types of deferment are:
In-School Deferment
If you are enrolled in school at least half-time, you may be eligible for an in-school deferment. This deferment allows you to temporarily stop making payments on your loans while you are in school. You must be enrolled at an eligible school and working toward a degree or certificate.
Unemployment Deferment
If you are unable to find full-time employment or are experiencing economic hardship, you may be eligible for an unemployment deferment. This deferment allows you to temporarily stop making payments on your loans while you are actively seeking employment.
Military Deferment
If you are on active duty in the military or have been called to active duty during a war or national emergency, you may be eligible for a military deferment. This deferment allows you to temporarily stop making payments on your loans while you are serving.
Parental Leave Deferment
If you are a parent and have recently had a child, you may be eligible for a parental leave deferment. This deferment allows you to temporarily stop making payments on your loans while you are caring for your child.
How to Apply for Student Loan Deferment
To apply for student loan deferment, you must contact your loan servicer or lender. They will provide you with the necessary forms and instructions for applying. You may be required to provide documentation to support your eligibility for deferment.
Important Things to Know About Student Loan Deferment
Before applying for student loan deferment, there are a few important things to keep in mind:
- Deferment is temporary, and you will eventually need to resume making payments on your loans.
- Interest may continue to accrue on certain types of loans during deferment, which could increase your total loan balance.
- Deferment may not be the best option for everyone. Depending on your situation, other repayment options, such as income-driven repayment plans, may be more beneficial.
Conclusion
Student loan deferment can be a helpful option for those who are struggling to make payments on their student loans. It provides temporary relief from payments and may help you avoid defaulting on your loans. However, it’s important to carefully consider your options before applying for deferment. Be sure to understand the eligibility requirements, types of deferment available, and the potential impact on your loan balance.
Frequently Asked Questions (FAQs)
01. How long can I defer my student loans?
The length of your deferment depends on the type of deferment you are granted. In general, deferments can last up to three years, but some types of deferment may have shorter or longer time limits.
02. Do I need to continue making payments while my deferment is being processed?
Until your deferment is approved, you are still responsible for making payments on your loans. If you miss payments while waiting for your deferment to be processed, your loans may become delinquent, and you could face consequences such as late fees or damage to your credit score.
03. Will interest accrue on my loans during deferment?
Interest may continue to accrue on some types of loans during deferment, which could increase your total loan balance. It’s important to understand the terms of your specific loan to determine if interest will accrue during deferment.
04. Can I still make payments on my loans during deferment?
Yes, you can make payments on your loans during deferment if you choose to do so. Making payments can help reduce the total amount of interest that accrues on your loans during deferment.
05. What happens if I don’t qualify for deferment?
If you don’t qualify for deferment, there may be other options available to help you manage your student loan payments. Contact your loan servicer or lender to discuss alternative repayment options, such as income-driven repayment plans or forbearance.
06. What happens if I don’t resume making payments after my deferment ends?
If you don’t resume making payments on your loans after your deferment ends, your loans may become delinquent or go into default. Defaulting on your loans can have serious consequences, such as damage to your credit score and wage garnishment.
07. Can I apply for deferment multiple times?
Yes, you can apply for deferment multiple times if you continue to meet the eligibility requirements. However, keep in mind that deferment is temporary, and you will eventually need to resume making payments on your loans.
