Students all go into their educational programs with the full intention of paying their student loans once they graduate. The government programs–and some private ones–make it easier for them by deferring loan repayment until six months after they leave school or graduate. However, sometimes this is not enough time, or other things happen that prevent the student from making payments then or later in the repayment cycle. When that happens, it’s time to look at deferments.

A deferment is where a lender will suspend payments or extend the grace period on a federal student loan. These deferments are considered according to the situation and circumstances surrounding the student’s difficulty, and on an individual basis. They also have time limits, and the student must meet certain conditions and criteria.

The deferments are usually granted for these circumstances:

 Graduate study
 At least half time enrollment in an educational program
 Lack of employment (with a 36 month limit)
 Financial hardships and difficulties (also with a 36 month limit)

In the case of the subsidized Stafford or Perkins Loans, your interest will be paid by the government during your period of deferment. If your loan was an unsubsidized Stafford loan, you will be responsible for covering the interest that accumulates during the deferment.

Often a deferment can be avoided by contacting the lending institution and making arrangements to pay the loan with lower payments. Often private student loans can be handled this way, but it’s up to the lender to determine if the offering is acceptable. In the case of the government loan, the student should contact the loan holder to discuss arrangements and to see if what he or she can pay is acceptable to the institution.

Any borrower who is considering a loan deferment should contact the loan holder. This way he or she can work directly with the agency and not have the confusion of a third person involved. If you wish to contact your loan holder and don’t know who it is, simply look in the National Student Loan Data System for the information.

If a deferment is not enough, you may have to consider a loan forgiveness program. This is a way of offering your service to the public in some form and having part of your loans paid or reduced by a percentage. If you are interested in loan forgiveness, you must meet criteria. You must also participate in one of the programs that repays and reduces your debt. This can be done through specific types of volunteer service, military service through the Army National Guard, teaching in certain low income schools, medical service in designated underserved communities (for medical school loans), and legal community and public service (for law school loans).

If you are interested in either a loan forgiveness program, contact your school’s financial aid office to see what work will qualify and through which agencies. Also make sure you know how much of your loan is covered and what you will be responsible for when you’re done with your service.

Visit our student loans index page to begin learning the basics of student financing in simple terms.