Understanding Student Loan Deferment

piggie bank with small graduation capWhen you defer payment of your student loan, it means that you are postponing payment of them. Deferment is only a temporary solution. Many federal student loans provide a six-month grace period immediately after a borrower graduates to allow him/her time to find employment before being required to make payments. It is important to note that if you have a subsidized loan, interest does not accrue during the deferment period. However, interest will accrue during deferment of an unsubsidized loan.

A few examples of types of student loan deferment options include:

  • Action Programs. If the borrower is a full-time paid volunteer in an Action Program and has agreed to serve at least one year, he/she may qualify for deferment of up to 36 months.
  • Armed Forces. If the borrower is on active duty in the United States armed forces, he/she may qualify for 36 months of deferment. Borrowers in the reserves may also qualify.
  • Economic Hardship. Borrowers who are receiving certain types of federal or state public assistance (such as Food Stamps) or who are working full-time and who have a total gross monthly income less than or equal to the larger of the monthly federal minimum wage rate or 150% of the poverty guideline for your state, may qualify for up to 36 month deferment.
  • Graduate Fellowship Program. If the borrower is enrolled in a fellowship program, he/she may be eligible for deferment.
  • Peace Corps. A borrower who agrees to serve in the Peace Corps for at least one year may obtain a deferment for up to 36 months.
  • Tax Exempt Organization. A borrower who is serving full-time in an eligible tax exempt organization for at least one year may qualify for up to a 36 month deferment.
  • Unemployment. After meeting numerous requirements, an unemployed borrower may be able to obtain deferment of his/her student loan.

The above list is not exhaustive and there are several other types of deferment options. If you are interested in learning more about obtaining deferment of your student loan payments, call us for assistance.

Please keep in mind that every matter is different. If you have questions about your student loan debt and you would like to schedule a no-cost consultation to discuss your options, please contact our office by completing the form on this website or calling us at (954) 932-5377.


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