Student loan deferment can be a great relief for students who are going through hard times and cannot make payments on their deferred loans. These situations are quite unexpected so it is always better to opt for student loans that allow this option at a later stage.
Most of the federal student loans such as Stafford loans and Perkins loan allow deferment options. There are basically five types of student loan deferments. These categories apply to federal loans, supplementary loans and even consolidated student loans.
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· Education Deferment: This type of student loan deferment depends on the student's enrolment status. A student is required be enrolled in a college full time or at least half-time to avail a deferred student loan, but due to some reason, if the student ceases to be enrolled half-time the payments on the loans can be deferred.
In such a situation, the school needs to send an In-school deferment form to the lender, confirming the enrollment of the student, either full-time or half-time. The student can defer the payment only if they have an outstanding Federal Stafford, Supplementary, PLUS or consolidated student loan.
· Economic deferment: This type of deferment applies if the student is facing economic hardships or is unemployed. To apply for student loan deferment under the economic deferment category, the student needs to provide a statement of their annual earnings. In that, they need to show that their income falls below the wage guidelines set by the Bureau of labor Statistics.
· Disability/Rehabilitation Deferment: This deferment is applicable for students who are recovering from an injury or illness, therefore are not in a position to work, or if they are receiving rehabilitation training (for drug/alcohol abuse or mental health training) from an approved program. Or if they are supporting a dependent or a spouse that is disabled.
In this type of deferment, the student should have developed the disability, injury or illness after obtaining the student loan. In case of injury, the student is unable to attend work or school for more than 60 days.
· Family Leave or Parental Leave Deferment: This type of deferment is available to both present and former students. The student must be pregnant, caring for a new baby or a newly adopted child and cannot attend work or school because of these situations. This deferment can be applied for a maximum period of six months for each occurrence. Currently, there is no limit to the number of occurrences.
· Public Service Deferment: If the student is on public service duties such as serving in armed forces, public health services, National Oceanic & Atmospheric Administration (NOAA), volunteer under the Peace Corps Act or in an ACTION program, or serving as a volunteer for a tax exempt organization which is equivalent to Peace Corps Act or in an ACTION program, then the student qualifies for Public Service Deferment.
For all the above types of student loan deferment, a student needs to fill up the appropriate forms which are available with the lender. It is important to contact the lender for deferment before you default on your payments.
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