Understanding Student Loan Deferment

student loan deferment

A student loan is type of financial aid given to students by federal, state or local governments, private lending institutions, and banks to help students pay for tuition, textbooks, and other educational related living expenses.

Most lenders allow deferment of student debt when borrowers face difficulty in repayment of loans within a given period of time. Deferment lets borrowers temporarily suspend the repayment of student loans. By postponing the loan you promise to resume payments on the student loan when you are able or when your deferment benefits have expired.

Many students currently enrolled in school choose to defer their loans so that they can focus on their school work. However, not only currently enrolled students are eligible for deferment. Loans that origination with the U.S. Department of Education come with a number of built in deferment benefits. According to materials posted at the U.S. Department of Education’s website, students may qualify for deferment if they:

  • Are enrolled in college or career school at least part-time
  • ​Are participating in a graduate fellowship program
  • ​Are participating in a rehabilitation training program for disabled people
  • ​Are unemployed or unable to find full-time work
  • ​Are enduring a time of economic hardship
  • ​Are serving with the Peace Corps
  • ​Are serving in the military
  • ​Have just completed a period of military service

Private student loans might also have deferment options available, however, the options available can vary significantly from lender to lender and loan to loan. In most cases, details in regards to deferment eligibility are found in the loan documents such as the promissory note, or the information may be available directly on the private lenders website. When in doubt or confusion it is best to call customer support at your lender directly.

In most cases, the process of deferring a student loan payment begins by talking with the servicer of the loan. The student must explain why they should receive deferment benefits and ask about any available options. You can use this deferment calculator to estimate the costs and impact of deferment. 

It is vital that borrowers are open about their financial situation. Often, deferment options may only be available to borrowers who are current on their account. If a borrower misses even one payment they may lose their deferment options.