Whether you’re returning to school or struggling through financial hardship, deferring your student loans can help you get by when you’re strapped for cash.
As of the second quarter of 2019, $3.5 billion in federal direct loans were in economic hardship deferment, according to the U.S. Department of Education. That means you’re not alone.
Hopefully, you’ve done your research and weighed the pros and cons of deferment. If you’re ready to take the next step, here’s how to defer student loans. Let’s look at each case:
- How to defer federal student loans
- How to defer private student loans
- Deciding whether to defer student loans
Deferment allows you to pause your federal student loan repayment for up to three years. If you are enrolled at least half time, your in-school deferment is typically automatic.
Deferment can give you some breathing room, but interest may still accrue on your debt. There are eight types of federal student loan deferments:
- Parent PLUS borrower
- Graduate fellowship
- Cancer treatment
- Rehabilitation training program
- Economic hardship
- Military service and post-active duty student
Visit Federal Student Aid to get the appropriate student loan deferment forms.
How to apply to defer your federal student loans
When you need to defer your federal student loans, log in to your loan servicer’s website or call its customer service line to ensure your eligibility. Then, follow your servicer’s instructions.
Next, fill out the appropriate deferral request form. Doing so online is recommended for faster processing, but you can also download and print a hard copy, filling in the blanks with a dark-ink pen.
You’ll start by filling out basic information, such as your name, address and Social Security number.
Some of the forms will ask for supporting documentation. The Unemployment Deferment Request form, for example, asks you to include proof of eligibility for unemployment benefits. In other cases, your servicer may ask you for additional documentation after it receives your application.
You may also need help filling out your form. The In-School Deferment Request form, for example, requires an authorized official to provide information regarding your enrollment status.
You have three options to ensure this is completed:
- Ask your school’s financial aid office to complete a hard or digital copy
- Leave the section blank but attach documentation from an official that includes the requested information
- Have your school report your enrollment to the National Student Loan Data System
Even after you’ve completed the form and followed the required application steps, continue making your regular loan payments. It’s essential to stay up to date on payments until you’re notified that the deferment request has been granted. Being delinquent or in default on your loan could harm your eligibility for support.
Deferring a private loan can follow a similar process, though private servicers typically use the terms “deferment” and “forbearance” interchangeably. Your options may be more limited.
If you are deferring student loan repayment while you’re in school, check with your loan servicer for any limitations on deferment. Some lenders might defer your loans only for a given number of years while attending school.
Before applying to defer private loans, you need to be aware that capitalizing interest could increase your loan balance.
Student Loan Deferment Calculator
Because there’s more variation among private lenders than among federal lenders, there isn’t a widely used set of instructions for requesting deferment.
For example, CommonBond offers academic deferment for those who plan to return to school. It is for borrowers who can make accumulated payments after graduation. It also offers hardship-related forbearance if you’ve lost income and administrative forbearance for situations such as bankruptcy. Forbearance is available for a maximum of 24 months. For specifics on either process, email [email protected] or call 800-975-7812.
Earnest, meanwhile, offers deferment for up to 36 months on its refinance loans for borrowers who return to an accredited graduate school at least half time. It also offers forbearance — for up to 12 months — under various scenarios, including if you lose your job or go on maternity leave. If you’re requesting deferment, you need to contact Earnest’s customer service team. If you’re seeking forbearance, you need to fill out the form located here and upload it to your Earnest profile.
If you plan on taking out more private loans to finance your education, figure out how much flexibility your preferred lender offers. It could come in handy in the future.
Is applying to defer payments the right choice for you? If the answer is yes, you now have a better understanding of how to defer student loans. So take control of your debt before it starts weighing on you.
If you’re still on the fence, look further at the differences between deferment and forbearance.
Yaёl Bizouati contributed to this report.