Student Loan Deferment

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There are several circumstances that allow current and former students to qualify for a student loan deferment. These deferment options will vary depending on the kind of loans that are outstanding and the borrower's financial and workplace status. But let's first answer the question - What is a student loan deferment?

A deferment means that no payments need be made on a student loan during the approved deferment period - the payments can be deferred until a later date. In the case of Subsidized Stafford Loans interest charges will not accrue during the deferment. This means that the size of the loan will not grow due to interest charges while the deferment is still in place.

Types of Student Loan Deferments

Additional Resources

There are a total of five types or categories of student loan deferments that we're going to discuss. The types listed below apply to Federal Stafford loans, Supplemental Loans, PLUS and consolidated student loans. Each of these has its own set of rules and will be explained in more detail in subsequent sections:

Education Deferments - this type of deferment has to do with a student's enrollment status, and is sometimes referred to as an in-school deferment.
Economic Deferment - generally dealing with specific types of economic hardships or unemployment.
Disability Deferment - a student loan deferment program that applies to disabled students.
Family Related Deferments - a loan deferment program that applies to mothers re-entering the workforce or those on parental leave.
Public Service Deferment - a student loan deferment program that applies to students that are in the Armed Forces, Peace Corps, volunteers, or in public health service.

Education Deferments

As long as the student borrower is attending school at least half-time - as defined by the school itself, then payments on the loan can be deferred until after the student ceases to be enrolled half-time. In fact, most loan payments will resume six months after half-time enrollment ceases.

An In-School deferment form may be needed to verify enrollment. If the school is a member of the National Clearinghouse then the enrollment data is kept electronically and may be sent to the lender through electronic transmission.

To qualify for an in-school student loan deferment:

You must have an outstanding Federal Stafford, Supplemental, PLUS, or consolidation loan.
Your college or university must certify your enrollment as a full-time or part-time student.

Economic Deferment

Economic deferments generally fall into one of two categories - economic hardships and unemployment deferments. For the student borrower to qualify the candidate must demonstrate need via a statement of annual earnings that their income is below certain wage guidelines established by the Bureau of Labor Statistics.

Economic Hardship Deferment

To qualify for an Economic Hardship Deferment the student must meet one of the following criteria:

Have been granted an Economic Hardship Deferment under the Federal Direct or Federal Perkins Loan programs.
Receiving public assistance payments.
Working at least 30 hours per week and have federal education loan payments that equal or exceed 20% of your monthly income. Also, when you subtract your federal student loan payments, your monthly income must fall at or below 220% of the minimum wage or the poverty line - whichever is greater.
Working at least 30 hours per week and earning no more than minimum wage or below the poverty line for a family of two - whichever is greater.
Working less than 30 hours per week and earning no more than twice the minimum wage or the poverty line amount - whichever is greater. Also, when you subtract your federal student loan payments, your monthly income must fall below the minimum wage or poverty line.
Serving as a Peace Corps volunteer now or some time in the future.

Unemployment Deferments

Students with outstanding loans may be eligible for an unemployment loan deferment for up to three years after they halt attendance at a school. The person trying to defer loan payments will likely be required to complete the unemployment deferment form every six months.

To qualify for an Unemployment Deferment the student needs to:

Have an outstanding Federal Stafford, Supplemental, PLUS or consolidation loan.
Conscientiously seek full-time employment in the U.S.
Register with a private or public employment agencies if there is one within 50 miles of the student's permanent or temporary address.
Confirm a job search for full-time employment during the preceding six months when applying for a continuation of an unemployment deferment.

Disability / Rehabilitation Deferment

A student may qualify for a loan deferment if they are receiving rehabilitation training under an approved program, if they are unable to work due to an injury or illness, or if they are caring for a dependent or spouse that is disabled.

To qualify for a disability deferment you must have an outstanding Federal Stafford, Supplemental. PLUS, or consolidation loan and in the case of disability, the student must:

Be unable to work or attend school for at least 60 days to recover from the illness or injury.
Developed the disability after obtaining student loans.
Be pregnant and with complications.
Have a spouse or dependent that requires at least 90 days of nursing or similar care. This care must prevent you from working full time.

To qualify for a rehabilitation deferment, the student must:

Be in a program that is licensed or recognized by a state agency as one that can provide rehabilitation training for drug / alcohol abuse and mental health services.
Be in a program that provides written, individualized plans with specific end dates for services and requires significant commitment to achieve rehabilitation.

Family Leave Student Loan Deferment

A parental leave or family leave student loan deferment is available to present and former students that are pregnant or caring for a newborn or a newly adopted child and cannot work or attend school. Parental leave deferments apply to outstanding Federal Stafford or Supplemental Loan that were obtained before July 1, 1993.

To qualify for a parental leave deferment the student or former student needs to be:

Pregnant or caring for a newborn or newly adopted child.
Unemployed or unable to attend school.
At least a half-time student during the six months preceding the application for this type of student loan deferment.

A parental leave deferment can be obtained for a maximum time limit of 6 months for each occurrence. There is presently no limit on the number of occurrences.

Public Service Student Loan Deferments

The student loan deferment rules as they apply to what is termed a public service deferment are quite generous. To qualify, you must have an outstanding Federal Stafford or Supplemental loan that was obtained before July 1, 1993 or a Federal PLUS loan that was obtained before August 15, 1983. There are a total of five types of public service deferments:

Military Deferment - this can be obtained while on active duty as a member of the Armed Forces or when serving full time for a minimum of one year in the National Guard or Reserves.
Public Health - a public health deferment applies while serving as a full time officer in the Commissioned Corps of Public Health of the United States Public Health Service.
NOAA - a NOAA deferment applies while serving actively in the National Oceanic & Atmospheric Administration (NOAA).
Peace Corps - applies while serving as a volunteer under the Peace Corps Act or in an ACTION program.
Tax Exempt Organization / Volunteer - applies while serving as a volunteer for a tax exempt organization that the U.S. Department of Education has determined to be comparable to a Peace Corps or ACTION program volunteer.

The qualifying rules for a public service student loan deferment as they apply to each of the five program types are as follows:

Military Deferment - documentation proving full-time active duty status in the U.S. Armed Forces.
Public Health - a statement from an authorized official of the Public Health Service, that certifies serving as a full-time officer in the Commissioned Corps of Public Health Service. This needs to include beginning and end dates of service.
NOAA - certification of active duty from an authorized official of the NOAA Corps.
Peace Corps - serving full-time in the Peace Corps for at least a one-year term.
Tax Exempt Organization / Volunteer - employed in an organization that is tax exempt Section 501 (c) (3) of the Internal Revenue Code that involves providing services to low income persons and their communities, assisting them in eliminating poverty and the related human, social and environmental conditions. Compensation received must not exceed the federal minimum wage.

Student Loan Deferment Forms

As you can see there are many different types of student loan deferment programs. If you believe that you qualify for a program that allows for deferring a student loan, then you should contact your lending agent or loan servicing organization for more information on the exact qualifying rules.

Your lending agent or loan servicing organization will also have the student loan deferment forms you will need to complete to be considered for such a deferment.

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