Student loan deferment is an agreement between the student and lender that allows the student to reduce or postpone repayment of a student loan for a designated period. Deferment or forbearance will prevent the loan from going into default, but may increase the overall cost of the loan. Students may be eligible for deferment while experiencing financial hardship or unemployment. The lender may require valid proof of financial hardship and other financial information when the student applies.
Deferment allows you to temporarily stop making payments on your student loan. During deferment, interest may accrue on unsubsidized loans, which means that the interest will be added to the principal balance of the loan, increasing the overall cost of the loan. To qualify for deferment, you must work with your loan servicer or lender and file an application.
Forbearance is another option that allows you to temporarily stop making payments or reduce your monthly payments for up to 12 months. Interest will accrue on all types of loans during forbearance, including subsidized loans. You must apply and qualify for forbearance, and it is generally granted at the discretion of the lender.
In summary, deferment of student loans is an agreement between the student and lender that allows the student to temporarily stop making payments on their student loan. Deferment may be granted to students experiencing financial hardship or unemployment, and interest may accrue on unsubsidized loans during deferment. To qualify for deferment, you must work with your loan servicer or lender and file an application.
