Deferments

Deferments are provided in the law. They are the temporary postponement of payment under special circumstances. During deferment, your monthly principal payments are postponed, and the federal government pays the interest on subsidized Federal Direct Loans. For an Unsubsidized Federal Direct borrower, monthly payments are postponed, but you are responsible for all the interest that accrues. Depending on which deferment you qualify for the length of the deferment varies. You must apply for the deferment in writing, using a form provided by the lender.

Deferment types -- for borrowers with outstanding Federal Education Loans disbursed before July 1, 1993. Check with your loan servicer.

Deferment Types -- for new borrowers with Direct or SLS Loans first disbursed on or after July 1, 1993, and at that time did not have an outstanding balance on any Federal Education Loans taken out before July 1, 1993.

• Unemployment -- up to three years.
• At least half-time enrollment at an eligible school.
• Participation in an approved rehabilitation program.
• Study under an approved graduate fellowship program.
• Experiencing economic hardship as defined by the Department of Education.

The U.S. Department of Education has indicated a borrower who is serving in a religious proselytizing capacity (missionary service) and is not employed during that period may qualify for a forebearance or reduced payment.  Click here for more information. 

Borrowers with an outstanding balance on a Stafford Loan prior to July 1, 1993, do not qualify for the hardship deferment and must apply for a forbearance.