How Do I Apply for Deferment or Forbearance?

Contact your loan servicer or school, depending on your circumstances, to apply for a deferment or forbearance. A deferment or forbearance lets you temporarily postpone making student loan payments or reduce the amount you’re required to pay. These arrangements can help you avoid defaulting on your student loan when you’re facing money troubles.

Should I Apply for Deferment or Forbearance?

A deferment or forbearance can help you if you’re struggling to pay for college due to temporary financial difficulties. The key difference between a deferment and a forbearance is that in many cases, the government will pay any interest that accrues on the loan during the deferment period. If you qualify for a deferment, your loan balance may not increase at all during the deferment period. However, this isn’t always the case. Some deferment plans do attract interest charges.

During a forbearance, you must always pay the interest on your student loan. If you don’t, your loan will become delinquent. Over time, you may default on the loan. Both deferments and forbearances are short-term solutions to financial difficulties. If you can’t see your financial situation improving, switching to an income-driven repayment plan may be a better solution.

Applying for Deferment

You’ll apply for a deferment through your loan servicer, your school, or both, depending on your circumstances. Apply through your loan servicer if you have a Direct loan. Students with Perkins loans apply for deferments through their school’s financial aid office. If you’re still attending college, speak to both your school’s financial aid office and your loan servicer to make your deferment application. You’ll complete a request form and submit this along with any documents that prove you’re eligible for the deferment.

Applying for Forbearance

Speak to your loan servicer to arrange a forbearance. Your loan servicer representative will supply you with a forbearance request form and tell you what documents you need to show your eligibility. Submit your completed form and supporting documentation to your loan servicer.

What Happens After You Apply?

Continue making loan payments as scheduled until your deferment or forbearance is approved. Otherwise, your loan will become delinquent, which will negatively impact your credit rating. In some cases, your loan servicer may contact you requesting more information. Supply this promptly to minimize processing delays.

If your application is denied, and you haven’t dealt with your school through the application process, you should contact your school’s financial aid office. The school can supply more information to process your deferment or forbearance.

If you’re approved for a deferment that waives interest, you can relax for the period of your deferment. If your deferment attracts interest or you have forbearance, you’ll start paying the interest charges rather than the loan repayment amount. Paying the entire interest charge each month will make sure your loan balance doesn’t increase. A student loan calculator can help you determine the monthly interest charges.

When you’re struggling financially due to a temporary hardship, deference or forbearance can help you improve your situation without disrupting your studies. Start the application process as soon as you can for the earliest approval.