If the borrower is unable to make monthly payments, he/she should contact the lender immediately to avoid default by considering alternative repayment options. In addition to loan deferment, forbearance, loan forgiveness, or loan discharge may be an option depending upon the circumstances.
The following gives an overview of deferment. For specific information, please refer to the Common Manual.
The borrower may request the lender to temporarily postpone (defer) student loan payments for a period of time for a specific reason. The federal government will pay the interest accrued during deferment for subsidized Federal Stafford loans. For unsubsidized Federal Stafford and PLUS loans, only the principal is deferred; the borrower is responsible for paying the interest during deferment.
Deferments are not automatic. The borrower must contact the lender as soon as an event occurs that temporarily affects the ability to make the loan payments.
The borrower must continue to make the loan payments until deferment is approved.
The deferment options available to a borrower is dependent upon when the borrower received his/her first student loan. See the Common Manual for a description of each deferment type, as well as a chart for each category of borrowers.
Requesting a Deferment
Deferments are not automatic. To request a deferment the borrower must:
- Contact the lender. The lender must determine if the borrower is eligible for a deferment. Deferment eligibility is based on the date the first FFELP loan was disbursed. (Some deferments can be granted by the lender based on information gathered from other sources such as a new loan for a borrower, or a deferment granted by another FFELP lender or Direct Loans. A military service deferement may be granted at the request of a borrower's representative.)
- Obtain the proper deferment request form.
- Complete the deferment request form and return it to the lender.
- Provide any required supporting documentation and/or certifications to the lender.
- Continue to make student loan payments until the deferment request is approved. If the borrower stops making payments, they may default and lose deferment eligibility.