You’ve got your degree, consolidated your loans, and have been paying them religiously through direct debit. But then you lose your job, or you decide to go back to school. What do you do when you can’t afford your payments anymore? Deferring student loans can be used in special circumstances until your life is back in order.

Remember, all loans are different. Contact your lender for specifics on how you can defer your payments. The information below is for government sponsored loans; private loans can have a different set of rules.

Reasons for Deferment

1. Unemployment
2. Military Service
3. PeaceCorps, TeachforAmerica, or other national service programs
4. You are going back to school at least half time
5. Working parent (congrats!)
6. You are part of an internship or fellowship
7. The economy got the best of you (aka economic hardship)
8. An injury has prevented you from working

How to Apply for Deferment

All lenders are different, but most allow you to apply for deferment online. In some instances you won’t have to do anything. If you are going back to school for example, the school tells your lender that you are in school and your payments are automatically deferred.

You can find a number of forms to download here.

Please note that you only need the government part of the form. Some have sales pitches attached that might make it look like you need to buy something first. Not true.

The Truth about Interest

There are two types of student loans, and just like in college they accrue interest differently. The same rules stand in deferment. If you have UNSUBSIDIZED loans, they will continue to accrue interest when you are in deferment. SUBSIDIZED loans on the other hand will stop accruing interest until you are out of deferment.

If you don’t know which kind you have, call your lender and they can tell you more.

Resources

• Sallie Mae
• StaffordLoan.com
• Mahalo Guide on Deferment