Student Loan Deferment

Student Loan Deferment

Through a student loan deferment, the borrower can postpone payments on student loan for a specified amount of time. Interest does not accrue during this postponement. A deferment helps the student to avoid defaulting on their loan due to extenuating circumstances, such as unemployment or military deployment.

After the deferment has run its course, the student is expected to begin repayment. There is no limit to the number of deferments a student can request, although granting one is at the sole discretion of the lender.

With a growing number of students leaving college to enter an anemic job market, many graduates are opting to intern out of school to gain experience. Depending on the loan, this is also a valid reason for requesting a deferment.

For students with financial difficulty that don’t qualify for a deferment, another option is forbearance. Like a deferment, forbearance temporarily suspends payments on a student loan. The difference is that interest will accrue during this suspension, and it will be added as principal to the loan when repayment recommences.

Something of note: certain loans can be forgiven – meaning that they don’t have to be repaid – if the student meets certain qualifications. This most often involves working in specific professions, such as a teacher for certain subject or within specified school systems.