Have you hit a rough spot financially and found yourself having a hard time making the minimum payments on your student loans?
If so, then you may be looking into your options.
No one wants to get behind on their student loans. This can have a negative impact on your credit report, and it can also cause you to take a lot longer to pay off your loans. The good news is that there are options for you to consider if you are in a tight spot. One option you may consider is deferment of your student loans. Let’s take a closer look and see if that may be a good solution for you.
What is Student Loan Deferment?
A student loan deferment is basically a benefit that allows you to stop making your payments temporarily, until you are in a position to make them again. Student loans are often placed into deferment status during the period you are enrolled in school. Deferment is also possible in the form of a forbearance, if money is tight and you simply cannot make your payments. There are three different types of deferments to be aware of, including economic hardship deferments, unemployment deferments and in-school deferments. During such deferments, all subsidized federal loans will have the interest paid by the federal government. This is why deferment is often preferable to a forbearance.
Deferment is an option available for nearly all federal loans, but private loans have stricter guidelines and may not be as forgiving. This doesn’t mean you can’t get a deferment on your private loans, it only means that you need to check with your private loan servicer to see if it is possible.
Why Would You Apply for Deferment?
So, what are some possible reasons that a student debtor would want to apply for a deferment? There are actually quite a few common reasons that people choose to have their student loans deferred. For instance, if money is tight and you are unable to make your payments, you may be eligible for a deferment. The same is true if you are currently unemployed or receiving government assistance. Military members may also choose to defer their student loans while they are in active service or deployed. Just remember, as long as your loans are in deferment you will not be responsible for the interest. That doesn’t mean the government is also making your payments for you. After your deferment period, your student loans will still be there, and will need to be paid.
How to Apply for Deferment
A deferment is not something that happens automatically if you fall behind on your student loan payments. You must apply for the deferment. Once you check the eligibility requirements for a deferment on your federal student loans, you will need to request an application from your loan servicer. They will send you a form to fill out and send back, along with any required documentation. The only time your loans will automatically go into deferment status is if you are enrolled in school at least half time. Once your loans do go into deferment status, you will receive a notification by mail letting you know the details of your deferment period.
Some deferments may last only six months, while others may last for a full year. You can also apply to have your deferment extended if you need a little longer before you begin paying on your loans again. Until you get a notification saying your loans are in deferment, you don’t want to miss payments. This can negatively affect your credit, among other things, causing your loans to be in default status.
Eligibility for deferment of private student loans will vary. The best thing that you can do is talk with your loan servicer about your options. They will be able to let you know if deferment is possible, and how to apply. If a deferment is not an option with your loans, then they may give you other options to consider that will help make your monthly payments more affordable for you.
As you can see, deferment can be a great tool for student debtors. While you don’t want to put off paying your student loans, sometimes life happens and you may need a little help from time to time. The good news is that deferment status can help keep your loans from being defaulted. Defaulted student loans can lead to a plethora of problems, and should be avoided at all costs. Talk to your servicer today if you feel that a deferment on your student loans might be right for you.