Everyone experiences financial difficulty at one time or another. Fortunately, you can usually postpone loan payments under certain circumstances using a deferment or forbearance.
A deferment or forbearance may be the right choice to keep your loan from entering default.
|What Is It||Deferment is a period of time during which your lender temporarily suspends your regular payments.||Forbearance is a period of time during which your lender temporarily reduces or suspends your regular payments.|
|Reasons to Apply||
|Who Pays the Interest||
Subsidized federal loans—The government pays the daily interest that accrues.
All other loan types—You are usually responsible for paying the daily interest that accrues.
|All loans—You are usually responsible for paying the daily interest that accrues.|
Loan programs come with limited amounts of deferment and forbearance time, so use these opportunities wisely.
- If you are unable to make the monthly payments on your student loan, call your lender or servicer immediately. Your lender/loan servicer can explain the details about any deferment and forbearance options they offer.
- Even if your monthly payments are suspended, interest may continue to accrue on your loan.
- If you can't afford to pay the interest that is accruing, the interest will be added to the principal balance on the loan (through "capitalization"). Your lender/servicer will do this automatically if you do not contact them.
- Always see if you qualify for a deferment before using a forbearance, since interest continues to accrue during forbearance no matter what type of loan you have.
Download deferment and forbearance forms online or contact your servicer directly to apply for a deferment or forbearance or to determine eligibility.