Student loan deferment and forbearance are two options that allow federal student loan borrowers to temporarily stop making payments on their loans. Deferment is available for borrowers who are experiencing financial hardship, while forbearance is available for borrowers who are experiencing a temporary hardship.
Deferment is a period of time during which the borrower does not have to make payments on their student loans. Interest will not accrue on the loans during deferment. Deferment is available for up to three years, and borrowers can apply for deferment multiple times.
Forbearance is a period of time during which the borrower does not have to make payments on their student loans. Interest will continue to accrue on the loans during forbearance. Forbearance is available for up to 12 months, and borrowers can apply for forbearance multiple times.
Student Loan Deferment vs Forbearance
Student loan deferment and forbearance are two options that allow federal student loan borrowers to temporarily stop making payments on their loans.
- Deferment: A period of time during which the borrower does not have to make payments on their loans and interest does not accrue.
- Forbearance: A period of time during which the borrower does not have to make payments on their loans but interest continues to accrue.
These two options can be helpful for borrowers who are experiencing financial hardship or who are temporarily unable to make their loan payments. Deferment is typically available for borrowers who are enrolled in school at least half-time, who are unemployed, or who are experiencing other financial difficulties. Forbearance is typically available for borrowers who are experiencing a temporary hardship, such as a medical emergency or a job loss.
It is important to note that deferment and forbearance are not the same thing. Deferment is a more favorable option than forbearance because interest does not accrue on the loans during deferment. However, forbearance may be a better option for borrowers who are not eligible for deferment or who need a more flexible repayment option.
Deferment
Deferment is a valuable option for federal student loan borrowers who are experiencing financial hardship or who are temporarily unable to make their loan payments. Unlike forbearance, interest does not accrue on the loans during deferment, which can save borrowers a significant amount of money in the long run.
- Eligibility: Deferment is available to borrowers who are enrolled in school at least half-time, who are unemployed, or who are experiencing other financial difficulties.
- Benefits: Deferment can help borrowers to avoid defaulting on their loans and can give them the time they need to get their finances back on track.
- Drawbacks: Deferment is not available to all borrowers, and it can delay the repayment of the loans.
Overall, deferment can be a helpful option for federal student loan borrowers who are experiencing financial hardship. However, it is important to weigh the benefits and drawbacks of deferment before making a decision.
Forbearance
Forbearance is a valuable option for federal student loan borrowers who are experiencing a temporary hardship, such as a medical emergency or a job loss. Unlike deferment, interest continues to accrue on the loans during forbearance. This means that borrowers who are in forbearance will have to pay more interest over the life of their loans.
However, forbearance can be a helpful option for borrowers who are not eligible for deferment or who need a more flexible repayment option. For example, forbearance may be a good option for borrowers who are planning to return to school or who are expecting to receive a large sum of money in the near future.
It is important to weigh the benefits and drawbacks of forbearance before making a decision. Borrowers who are considering forbearance should speak with their loan servicer to learn more about their options.
FAQs on Student Loan Deferment and Forbearance
Deferment and forbearance are two options that can help federal student loan borrowers who are experiencing financial hardship. However, there are some important differences between the two options.
Question 1: What is the difference between deferment and forbearance?
Answer: Deferment is a period of time during which the borrower does not have to make payments on their loans and interest does not accrue. Forbearance is a period of time during which the borrower does not have to make payments on their loans but interest continues to accrue.
Question 2: Who is eligible for deferment?
Answer: Deferment is available to borrowers who are enrolled in school at least half-time, who are unemployed, or who are experiencing other financial difficulties.
Question 3: Who is eligible for forbearance?
Answer: Forbearance is available to borrowers who are experiencing a temporary hardship, such as a medical emergency or a job loss.
Question 4: What are the benefits of deferment and forbearance?
Answer: Deferment and forbearance can help borrowers to avoid defaulting on their loans and can give them the time they need to get their finances back on track.
Summary of key takeaways or final thought:
Deferment and forbearance can be helpful options for federal student loan borrowers who are experiencing financial hardship. However, it is important to understand the differences between the two options and to weigh the benefits and drawbacks before making a decision.
Transition to the next article section:
If you are considering deferment or forbearance, you should speak with your loan servicer to learn more about your options.
Tips for Student Loan Deferment and Forbearance
Deferment and forbearance can be helpful options for federal student loan borrowers who are experiencing financial hardship. However, it is important to use these options wisely to avoid unnecessary costs and delays in repayment.
1. Understand the difference between deferment and forbearance.
Deferment is a period of time during which the borrower does not have to make payments on their loans and interest does not accrue. Forbearance is a period of time during which the borrower does not have to make payments on their loans but interest continues to accrue.
2. Consider deferment first.
Deferment is a more favorable option than forbearance because interest does not accrue on the loans during deferment. However, deferment is not available to all borrowers.
3. Apply for deferment or forbearance as soon as possible.
Deferment and forbearance are not retroactive. This means that borrowers cannot receive a refund for payments that were made before the deferment or forbearance period began.
4. Keep your loan servicer informed.
Borrowers who are experiencing financial hardship should contact their loan servicer as soon as possible. The loan servicer can help borrowers to apply for deferment or forbearance and can provide information about other repayment options.
5. Make payments if you can.
Even if borrowers are eligible for deferment or forbearance, they should make payments on their loans if they can afford to do so. Making payments will help to reduce the amount of interest that accrues on the loans.
Summary of key takeaways or benefits:
By following these tips, borrowers can use deferment and forbearance to avoid defaulting on their loans and to get their finances back on track.
article’s conclusion:
Deferment and forbearance can be helpful options for federal student loan borrowers who are experiencing financial hardship. However, it is important to use these options wisely to avoid unnecessary costs and delays in repayment.
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