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DEFERMENT AND FORBEARANCE

There are a number of deferment and forbearance options available to students who borrow through the Federal loan programs.  All students are given 1 six month grace period through the federal lender.  Your repayment on your loan begins 6 months after you graduate OR stop attending for half-time status.  If you are not able to begin making payments once your grace period is expired you have a number of options available to you.

What is a deferment?  What is a forbearance? 

A deferment is a period of time during which no payments are required and interest does not accrue, unless you have an unsubsidized loan.  If you do that interest does accumulate and you may be required to pay it during your deferment period. 

A forbearance is a temporary postponement or reduction of your payment.  Interest continues to accrue on your loan but you are not responsible to pay it, no matter what kind of loan you have. 

*NEW DEFERMENT OPTION FROM THE FEDERAL GOVERNMENT as of 3/20/09*

For Direct PLUS Loans that are first disbursed on or after July 1, 2008, parent borrowers have the option of deferring repayment based on the enrollment status of the dependent student on whose behalf a Direct PLUS Loan was obtained. Specifically, parent Direct PLUS Loan borrowers may defer repayment:

• While the dependent student on whose behalf the loan was obtained is enrolled on at least a half-time basis, and
• During the 6-month period after the dependent student on whose behalf the loan was obtained ceases to be enrolled on at least a half-time basis.

Parent borrowers must contact the Direct Loan Servicing Center at 800-848-0979 to request a deferment based on the dependent student's enrollment status. If a parent Direct PLUS Loan borrower requests a deferment, the servicing center will first try to confirm the student's enrollment status available in either the Direct Loan Servicing System or the National Student Loan Data System (NSLDS). If there is no enrollment information available, the parent will be asked to provide enrollment documentation from the student's school and submit it to the servicing center.

Remember:

• Interest will still accrue during the deferment period
• The parent borrower will be sent interest statements and will have the option of paying the interest during the deferment period
• The unpaid accrued interest will be capitalized (added to the principal balance) at the end of the deferment period
• Direct PLUS loans with an earliest disbursement date prior to July 1, 2008 are not eligible for this deferment
• If you have questions, please contact the Direct Loan Servicing Center at 800-848-0979. Hearing-impaired borrowers can call 1-800-848-0983.

Can my loans be forgiven?

Great question.  Certain academic majors have the possibility of loan forgiveness.  The following links will provide you with more information.