Many student loan borrowers have heard the term “deferment,” but they don’t really understand what it means. Deferment means your lender has agreed to postpone when your payments are due. It provides you temporary relief from the burden of making your monthly payments.
Most federal student loans give you a six-month grace period following your graduation to allow you time to find a job. Graduates should remember that if they have a subsidized loan, interest does not accrue during the deferment period, but it does accrue during deferment of an unsubsidized loan.
Below are a few types of student loan deferment options:
- Action Programs. If you have a full-time paid volunteer position with a qualified Action Program and you have agreed to serve at least one year, you may be eligible for deferment of up to three years.
- Economic Hardship. If you are receiving public assistance such as Food Stamps or you have full-time employment but your total gross monthly income is less than or equal to the greater of the federal minimum wage rate or 150% of the poverty guideline for your state, you may be eligible for up to a three year deferment.
- Peace Corps. If you have agreed to serve in the Peace Corps for at least one year, you may be able to obtain a deferment for up to three years.
- Armed Forces. If you are active duty (reserves may be eligible also) in the United States armed forces, you may qualify for 36 months of deferment.
- Graduate Fellowship Program. If you are enrolled in a fellowship program, you might qualify for deferment.
- Unemployment. If you are unemployed and you meet several other requirements, you may be able to obtain deferment of your student loan.
- Tax Exempt Organization. If you are serving full-time in an eligible tax exempt organization for at least one year, you may qualify for up to a 36 month deferment.
There are other forms of deferment, so you should let us review your individual circumstances and determine what options are available to you.
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