9 Instances Where You Can Defer Your Student Loans
Students enrolled in certain programs in Colorado colleges and universities may be eligible for deferment on their student loans. Deferment allows borrowers to halt making payments or pay reduced payments for a temporary period. For school loans awarded by the college, university or technical school in which a student is enrolled, the borrower can apply for deferment from the institution itself, whereas federal student loan borrowers can apply for deferment from the loan servicer. Deferments can be awarded due to economic hardship or unemployment. In most cases, the final decision on whether student loan deferment is generally available or available for a specific student or graduate is fully up to the lender. If you are unable to qualify for student loan deferment yet remain unable to make payments on your loan, your next step is to apply for student loan forbearance. Student loan deferment can help borrowers to avoid defaulting on their loans. You must continue making payments on your loan until your application for deferment is approved. If you are considering deferring your student loan, review these instances where you may be eligible for deferment.
1. While Enrolled Half-Time or More
Most loans eligible for deferment are automatically deferred for as long as a borrower remains enrolled in the given school and registered for classes at least half time. This type of deferment is called an “In School Deferment” and applies to Direct PLUS and FEEL PLUS loans for graduate and professional students. A student can also receive this deferment if he or she returns to school at least half time after leaving school and beginning the repayment period. If the student meets these qualifications but the student loan has not been automatically deferred, he or she can contact the school directly to request a notification be sent to the loan servicer to confirm deferment eligibility. An In School Deferment lasts for six months beyond the period when the student ceased enrollment in classes at least half time. Parents who received loans for their children can also receive deferments if children are enrolled in classes at least half time. This type of deferment is known as a Parent PLUS Borrower Deferment.
2. Graduate Fellows
If you are enrolled in a fellowship program for graduates that is approved by your loan servicer, you may be eligible to receive a Graduate Fellowship Deferment. You need to work directly with your loan servicer for the specific terms and conditions of the deferment.
3. Rehabilitation Trainees
If you are enrolled in a training program for rehabilitating disabled persons that is approved by your loan servicer, you may be eligible to receive a Rehabilitation Training Program Deferment. This type of deferment is only temporary and will cease when you complete your rehabilitation training.
You may be eligible to receive an Unemployment Deferment for as many as three years after graduation if you cannot find full-time work or you lose your job during the repayment period, until you find work again.
5. Financial Hardship
if you are undergoing financial hardship, you may be eligible to receive an Economic Hardship Deferment for as many as three years after graduation. You may also be eligible for this type of deferment if you serve in the Peace Corps.
6. Military Service
If you are serving on active duty in the military during a time of war, a national emergency or a military operation, you may be eligible for a Military Service and Post-Active Duty Student Deferment. The deferment is offered during the service period and for the 13 months following its conclusion unless you return to school at least half-time, whichever comes first.
7. Perkins Loans
Deferments on Perkins Loans are available for borrowers who are in the process of trying to get their loans cancelled. Typically, a Perkins Loan borrower receives a “post-deferment grace period” of six months following his or her inability to meet the requirements for deferment, during which time no payments on the Perkins Loan are due.
8. Postdocs at University of Colorado
Postdoctoral trainees and fellows hired at the Anschutz Medical campus and Denver campus of the University of Colorado in job code 1438 may qualify for student loan deferment at the lender’s prerogative. Eligible students may submit an application to the appropriate funding agency and call the University of Colorado’s Postdoctoral Program Manager to confirm student loan deferment is available. If it is available, the trainee or fellow can make an appointment to finish completing the University section of the form.
9. Pre-1993 Borrowers
Borrowers of FEEL Program Loans prior to July 1, 1993 who have balances remaining or borrowers of Direct Loans prior to that date who currently have balances remaining on a FEEL Program Loan may qualify for further deferment options. Potential eligible borrowers should contact loan servicers directly to find out about additional options, if available.
Alternatives to Deferment
In addition to forbearance, other alternatives to deferment that you may consider if you are unable to make repayments on your student loan include income-driven repayment plans. These plans base the amount of your monthly payments on your income and the size of your household. Depending on the lender, if you are unable to pay off your student loan after 20 to 25 years, you may then qualify for full student loan forgiveness, also known as loan discharge, completely eliminating the remainder of your student loan debt.