Student loan deferment and forbearance

How they work and how they can give you repayment flexibility

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What is student loan deferment?
Deferment puts the loan on hold while you get your finances in order.

You stop payment on the loan’s principal. It may or may not accrue interest while in deferment.

Are you eligible for deferment?
Eligibility depends on the type of loan and circumstance.

Federal loans may be deferred for reasons such as:

  • Disability
  • Unemployment
  • Income below minimum wage
  • Returning to school

Depending on your reason, your loan may be deferred for up to three years. Contact your lender to see whether your situation applies.

About 30% of student loans* are in deferment or forbearance.
*Q1 2015, New America analysis of Department of Education data

How can you apply for deferment?
For private loans:

  • Terms vary by lender. Contact your lender for more information about the process.
  • Private loan deferrals tend to have less flexibility.

For federal loans:

  • Deferment applications are available through your loan servicer.
  • You must provide proof of need, such as information about your income or medical condition.
  • Perkins Loans require you to contact your lender—typically your college or university—to defer.

Get to know your loans
Knowing the details of your student loans—whether they’re subsidized or unsubsidized federal loans or private loans—can help you manage them more effectively. Visit studentaid.ed.gov for information about federal loans.

Does interest accrue while a loan is in deferment?
Unsubsidized loans accrue interest in deferment.
The government pays any interest that accrues on subsidized loans.

The value of paying while in deferment
Putting even a little money toward your loans while they’re in deferment can minimize the financial impact of deferment—especially if you can pay some of the interest on your unsubsidized loans. Any loan payments you make while in deferment will not end your deferment period.

What is forbearance?
If you don’t qualify for deferment and can’t make your payments, you may be able to request forbearance. This may halt or reduce your payments for up to a year. Interest accrues during this period regardless of loan type.

Are you eligible for forbearance?
Federal lenders must grant forbearance in several situations:

  • All your monthly federal loan payments total more than 20% of your gross monthly income.
  • You participate in a medical residency that meets specific requirements.
  • You are a member of the National Guard and have been called to active duty but do not qualify for a military deferment.

Consult studentaid.ed.gov for a full list and to see if additional conditions apply.

How can you apply for forbearance?
You apply for federal student loan forbearance with your loan servicer; you may need to provide documentation to support your application.

Close Disclaimer
The material provided on this website is for informational use only and is not intended for financial or investment advice. Bank of America and/or its affiliates, and Khan Academy, assume no liability for any loss or damage resulting from one’s reliance on the material provided. Please also note that such material is not updated regularly and that some of the information may not therefore be current. Consult with your own financial professional when making decisions regarding your financial or investment options.

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