The Money Coach
  • About
    • Meet Lynnette
    • Media Kit
  • Contact
  • Subscribe
  • QR Code
  • Books
  • Categories
  • Coaching
  • Hire Lynnette
  • Money Coach University™
  • The Money Coach Recommends™
No Result
View All Result
The Money Coach
  • About
    • Meet Lynnette
    • Media Kit
  • Contact
  • Subscribe
  • QR Code
No Result
View All Result
The Money Coach
No Result
View All Result

Student Loan Deferment and Forbearance Explained

Lynnette Khalfani-Cox, The Money Coach by Lynnette Khalfani-Cox, The Money Coach
in Student Loans
Reading Time: 3 mins read
7
SHARES
117
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn

When you get a federal student loan deferment or forbearance, it’s a way for the government to allow you to temporarily postpone making repayments on your student loans, or to alter the terms of your debt repayment schedule.

Any period where you have a deferment or forbearance doesn’t count towards the maximum length of time that you have to repay your loans. A deferment, in essence, is that period of time when the repayment on your principal balance of your student loan is temporarily postponed. You have to meet certain government requirements.

Student Loan Deferment Explained

During that deferment period, the federal government actually pays the interest on subsidized loans. That’s a plus for those of you who don’t want that interest to keep accruing and adding to the principal amount of the loans that you owe.

If you’ve got unsubsidized loans, however, or PLUS loans  Parent Loans for Undergraduate Students), you have to pay the interest that accrues during your deferment period.

Don’t get into a deferment without being fully aware of what your financial obligations are going to be. That interest is going to accrue if you have those unsubsidized loans or those PLUS loans. The interest accrues during your deferment, or it may be capitalized. That means your lender adds the accrued interest to your principal balance, and then you ultimately have to pay the entire amount.

To get a deferment, you have to be enrolled at least half time as a college student in some eligible institution of higher education. An “eligible” school is an institution that’s approved to participate in the Department of Education’s Federal Student Aid program.

There are other conditions that might qualify you for deferment. If you’ve had economic hardship, you can get a deferment for as long as three years. If you’ve been unable to find a job, you can get a deferment. Again, it can last up to three years.

If you’re in a graduate fellowship program or you’re in some kind of approved training program for the disabled, again, you qualify for a deferment.

People who are in the National Guard or some other reserve element of the U.S. armed forces — they too can qualify for deferments, particularly when you’ve been called or ordered to active duty and you’re still enrolled at least half time in school.

Lastly, if you’re a borrower who is on active duty in war ‑‑ let’s say you’re overseas, you’re in some foreign country, or participating in a military operation or some kind of national emergency ‑‑ then you also qualify for a deferment.


Getting a Student Loan Forbearance

Those who aren’t eligible for deferments shouldn’t lose hope because even if you don’t qualify for a deferent, and you can’t get your student loan payments temporarily postponed that way, you might qualify for a forbearance.

A forbearance is essentially another way to allow you to either postpone or possibly reduce your monthly payments for a limited amount of time that’s specified when you aren’t able to make your normal monthly payments for some reason.

Maybe you’ve been sick. Maybe you’ve been chronically ill. Maybe you’ve had a car accident. Maybe you’ve had extreme financial hardship and you haven’t been able to find a job. All of these are reasons that you might qualify for a student loan forbearance.

With a forbearance, though, remember ‑‑ unlike a student loan deferment — you are responsible for paying all the interest that accrues on those loans during your forbearance period. That includes those who have subsidized loans.

As mentioned previously, with a subsidized loan, if you get a deferment, you don’t have to pay the interest during your deferment period. But even if you have a subsidized loan, with a forbearance, you do have to pay the interest that accrues during your forbearance period.

Once you start making your payments at the end of the forbearance period, any of that unpaid interest that might have accrued along the way will ultimately get capitalized and added to your principal balance. So you will have to pay that interest sooner or later.

It’s also not just an automatic thing for you to get a deferment or forbearance. You have to actually reach out to your loan holder or your loan servicer and apply for one. You have to formally request it.

Don’t just think that they know if you’re, say, overseas or if you’ve told them, “Yes, I’m at least half time in school.” You still have to formally ask for a deferment or forbearance.

But getting some payment relief, in the form of a deferment or forbearance, can really can be of help to those of you who might be struggling or just flat out unable to make your federal student loan payments.

Tags: student loan defermentstudent loan forbearance
Previous Post

Here Are a Few Incentives to Repay Your Student Loans

Next Post

Is This Loan Modification Offer Legitimate or a Scam?

Related Posts

Adult Student Loans

Simple Reasons To Pay Your Adult Child’s Student Loans

by Lynnette Khalfani-Cox, The Money Coach

If you’re considering paying your adult child’s student loans here are 10 scenarios to consider saying YES, NO or MAYBE to repaying that college debt. 

Question About For-Profit Colleges and Student Loan Forgiveness

by Lynnette Khalfani-Cox, The Money Coach

After I posted 15 answers to Biden’s student loan forgiveness plan,  I received a lot of questions on my social media accounts about student loan forgiveness. I received the following question about the plan's impact on certain for-profit colleges.

Student Loan Forgiveness

Student Loan Forgiveness: The Biden Plan Explained

by Lynnette Khalfani-Cox, The Money Coach

Here's what is known so far about the new student loan cancellation program, how you can get student loan forgiveness, the surprising ways that past and future generations of college students will benefit, and what’s NOT included in the Biden plan.

CARES Act: Student Loan Relief

Get Your Employer to Pay $5,250 of Your Student Loans in 2020: FAQs About the CARES Act

by Lynnette Khalfani-Cox, The Money Coach

I recently posted a student loan tip on social media that went crazy viral! It racked up tons of traditional media coverage, plus many thousands of likes and shares (not to mention comments and questions!) across Twitter, Facebook and Instagram -- far more than any other single post I've shared....

COVID-19 Private Student Loans

COVID-19: Getting Relief From Your Private Student Loans – VIDEO

by Lynnette Khalfani-Cox, The Money Coach

In this video Lynnette shares good news for people who need help paying their private student loans during the COVID-19 pandemic.

Economic Relief Bill

COVID 19: A Good News Surprise in the Coronavirus Economic Relief Bill – VIDEO

by Lynnette Khalfani-Cox, The Money Coach

In this video Lynnette dives deep into the CARES Act and shares a pleasant surprise in the economic relief bill.

student loan relief covid-19

Are You Eligible for Student Loan Relief Under The CARES Act?

by Lynnette Khalfani-Cox, The Money Coach

The CARES Act, which includes a provision that decreases student loan interest to zero-percent, and allows individuals to suspend payments without penalty until September 30, 2020. 

Load More

Popular Posts

  • Car repair

    What to Do If You Can’t Afford a Car Repair Bill

    1378 shares
    Share 551 Tweet 345
  • What to Do if Your Spouse Stole Money From You

    1166 shares
    Share 466 Tweet 292
  • What to Do If You Can’t Afford to Leave Your Spouse

    1104 shares
    Share 442 Tweet 276
  • Here’s Why I Pay My Kids For Good Grades (And Maybe You Should Too)

    1011 shares
    Share 404 Tweet 253
  • What Do All Those Strange Codes In My Credit Report Mean?

    815 shares
    Share 326 Tweet 204
  • Do This Now If Your Wages Were Not Reported

    745 shares
    Share 298 Tweet 186
  • How to Find Out if a Debt Collector is Licensed to Collect Your Debt

    724 shares
    Share 290 Tweet 181

All information on this blog is for educational purposes only. Lynnette Khalfani-Cox, The Money Coach, is not a certified financial planner, registered investment adviser, or attorney. If you need specialty financial, investment or legal advice, please consult the appropriate professional. Advertising Disclosure: This site may accept advertising, affiliate payments or other forms of compensation from companies mentioned in articles. This compensation may impact how and where products and companies appear on this site. AskTheMoneyCoach™ and Lynnette Khalfani-Cox, The Money Coach® are trademarks of TheMoneyCoach.net, LLC.

©2009-2023 TheMoneyCoach.net, LLC. All Rights Reserved.

RSS / Sitemap /Submit an Article / Privacy Policy / LynnetteKhalfaniCox.com

No Result
View All Result
  • Books
  • Categories
  • Contact Lynnette
  • Get Coaching
  • Hire Lynnette
  • Money Coach University™
  • The Money Coach Recommends™
  • Home
  • Subscribe to Newsletter
  • QR Code

©2009-2021 TheMoneyCoach.net, LLC. All Rights Reserved.

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In

Add New Playlist