Loan Deferment and Forbearance
Contact your loan servicer(s) if you experience difficulty making payments. It is best to work with the servicer before a payment is missed. In some cases, you may be eligible for loan deferment or forbearance.
A deferment is a period of time during which a lender or servicer temporarily postpones regular payments. Deferments are granted for specific situations, as defined by the law. Documentation may be required.
If granted a deferment, the government will pay the interest on any subsidized loans for the length of the deferment. Interest on unsubsidized loans and Grad PLUS loans will continue to accrue. Unpaid interest during a period of deferment on unsubsidized or Grad PLUS loans will be capitalized; monthly payments may increase after the deferment period.
Who may qualify for Deferment:
- Those are enrolled in full or half-time study at an eligible school.
- Those who have an economic hardship.
- Those who are unemployed.
Forbearance is another option that may be able to help during periods of financial difficulty. During forbearance, a servicer temporarily reduces or postpones regular loan payments. This option is usually reserved for those who do not qualify for a deferment. Forbearance is granted at the servicer’s discretion.
The federal government does not pay interest on any loans, including subsidized loans during the forbearance period. Borrowers are responsible for any interest that accrues. Unpaid interest during a period of forbearance will be capitalized and monthly payments may increase after the forbearance period.