8 Types of Federal Student Loan Deferment

8 Types of Deferment Requests

If you have federal student loans, you may be able to defer your student loans for any of the following reasons.

1. In-School Deferment

Your loans should be automatically deferred while you're enrolled at least half time at an eligible college or vocational school, plus an additional six months after you graduate, leave school or drop below half-time status. If it's not automatic, you can contact your loan servicer and request it.

2. Parent PLUS Borrower Deferment

As with in-school deferment for students, parents who take out PLUS loans to help their child can apply for deferment while their child remains enrolled at least half time at an eligible college or career school, as well as for six months after they graduate, leave school or drop below half-time status.

The primary difference between the two is that parent PLUS borrower deferment is not automatic.

3. Economic Hardship Deferment

You may be eligible for deferment if you're receiving a means-tested government benefit, such as welfare; you work full time but have earnings below 150% of the federal poverty guideline for your family size and state of residence; or you're serving in the Peace Corps.

With this option, you can receive a deferment of payments for up to three years.

4. Unemployment Deferment

If you're on unemployment benefits or you're looking for a job without success, you may be eligible for up to three years of deferment.

5. Graduate Fellowship Deferment

If you enroll in an approved graduate fellowship program—typically for doctoral students, but some master's degree students may be eligible—you may qualify for deferment while you're in the program.

6. Rehabilitation Training Program Deferment

You may be eligible for deferred payments while you are enrolled in an approved rehabilitation training program for vocational, drug abuse, mental health or alcohol abuse treatment.

7. Military Service and Post-Active-Duty Student Deferment

You can qualify while you are on active-duty military service in connection with a war, military operation or national emergency, or if you've recently completed qualifying active-duty service.

Deferment lasts for the 13-month period following the conclusion of that service and any applicable grace period, or until you return to college or career school on at least a half-time basis, whichever is earlier.

8. Cancer Treatment Deferment

You can apply for this type of deferment if you're currently undergoing cancer treatment. It lasts for the duration of your treatment plus six months after it ends.

How to Request Student Loan Deferment

While each type of federal loan deferment has its own form, the process is relatively simple and uniform across all types.

1. Visit the Federal Student Aid website and select the form for the type of deferment you want to request.
2. Fill out your personal information and review the eligibility section to ensure that you qualify.
3. Provide any additional information required in the deferment application, then sign and date it.
4. Submit the request, along with supporting documentation, directly to your student loan servicer.

Once you submit the request, your loan servicer may ask for additional documentation before making a decision.

Note that if you have private student loans, you'll need to contact your lender to learn about eligibility and the application process.

Alternatives to Student Loan Deferment

While federal loan deferment can be helpful, it's not always available. And in some cases, it may not be the best option for you. Here are some potential alternatives to consider:

• Forbearance: If you're dealing with financial difficulties, medical bills, a change in unemployment or other challenges, your loan servicer may grant you forbearance. Additionally, loan servicers are required to grant forbearance if you're in the AmeriCorps, on the Department of Defense student loan repayment program, in a medical or dental internship or residency, on National Guard duty, working toward Teacher Loan Forgiveness, or your monthly payments are 20% or more of your gross income.
• Student loan forgiveness: When the application is available, be sure to apply for student loan forgiveness offered by the Biden administration. You can learn more and find out about when the application is available on the Federal Student Aid website. You can also look into other student loan forgiveness and repayment assistance programs to see if you qualify.
• Income-driven repayment: If you're struggling with monthly payments but don't necessarily need deferment or forbearance, you may consider applying for income-driven repayment. There are currently four options from which you can choose. Depending on which one you get, your monthly payments may be reduced to 10% to 20% of your discretionary income, and your repayment term will be extended to 20 or 25 years. Once that repayment period has ended, the remainder of your debt will be forgiven.
• Refinancing: Refinancing isn't always the best choice with federal loans, but if you want a lower monthly payment and a lower interest rate and don't anticipate needing any other federal loan benefits, it could be worth a try. Take your time to shop around and compare multiple student loan refinance companies to find the right fit.

Whatever you do, it's crucial that you take your time to research and carefully consider all of your options before you decide which path to take.

The Bottom Line

When you're having trouble making your payments temporarily, deferment could be worth considering, but it's also important to consider your other options before submitting your request.

The important thing is that you take whatever steps necessary to avoid missing payments, as that can have a devastating impact on your credit score. During this process, it's a good idea to monitor your credit regularly to keep an eye on your credit score and address any issues as they arise.