How Does Student Loan Deferment Works?

Student loan deferment is a way to postpone repaying your student loans for some time. You can qualify for deferment if you’re in one of the following situations:

What is student loan deferment?

Student loan deferment extension is when you don’t have to make payments on your federal student loans. There are two kinds of student loan deferments:

• A standard or conditional student loan deferment means you don’t need to make payments, but some conditions must be met for it to be granted. For example, if you work in the public service field and meet specific requirements, your federal loans may qualify for this type of deferment. You should check with each lender individually, as they all have different criteria for granting this type of deferment.
• An unemployment or economic hardship student loan deferment is offered to you if you are unemployed or experiencing economic hardship. Then your federal loans may qualify for an unemployment/economic hardship student loan deferment for up to three years at a time. To qualify for this type of deferment, borrowers must provide documentation proving their status.

What is the difference between forbearance and deferment?

Deferment status is different from forbearance. Forbearance is a temporary postponement of your loan payments, whereas deferment is a postponement of your loan payments for a specified period of time.

• Forbearance can be granted at the discretion of your lender and may depend upon your financial situation, whether or not you are employed, and other factors. With forbearance, monthly installments are reduced or eliminated while interest continues to accrue on the principal balance (amount owed).
• Deferment status usually requires that certain conditions be met; some examples include: (1) being enrolled full time at an eligible educational institution (2) having filed for Federal bankruptcy protection within the past five years; (3) serving in AmeriCorps; etc.

Who qualifies for deferment?

If you meet the following criteria, your loans are eligible for deferment:

• You’re serving in a medical or dental internship or residency program and have made formal arrangements to satisfy those obligations.
• You’re serving in a full-time AmeriCorps position for at least one year.
• You’re on active duty with the Armed Forces of the United States.

If any of these apply to you, no further action is necessary; your loan servicer will automatically place your loan into deferment while you fulfill those requirements. If none of these conditions apply, however, don’t panic! There are still several ways in which you can qualify for student loan repayment relief under certain circumstances—and it’s not as difficult as it sounds! Lantern by SoFi experts say, “General forbearances are available for federal Direct Loans, Federal Family Education (FFEL) Program loans, and Perkins Loans.”

What types of loans qualify for deferment?

Many types of loans qualify for deferment. Federal student loans, private student loans and PLUS loans can all be deferred in the event you meet one of the following conditions:

• You are on active duty military service or have been called up to active duty.
• You’re performing voluntary service through AmeriCorps (VISTA) or Peace Corps.* You’re on disability leave from a job, and you’re unable to work because of your disability.

With student loan deferment, you don’t have to pay back your student loans. You can also put off paying off other types of debt like credit cards or mortgages. To take advantage of this option, you need to apply for it before your grace period ends and make sure that there are no payments due on any other debts during the time period when you’re not making payments on your loans.