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Some Things To Know About Student Loans: Deferment Of Student Loans

Loan Lawyers may provide assistance to student loan debtors who are experiencing difficulty repaying their student loan obligations. Some student loan debtors may obtain a deferment of their student loan payments in these situations.

When student loan debtors receive a deferment of their student loans, the repayment of the principal and interest of the loan is temporarily delayed for the period of the deferment. During this period, a student loan debtor is not required to make any payments on the loan. Also, depending upon the type of loan, the federal government may pay the interest during the deferment period. Examples of such loans are Federal Perkins Loans, Direct Subsidized Loans, and Subsidized Federal Stafford Loans. However, the federal government will not pay any interest on PLUS or any unsubsidized loans.

Student loan debtors are still ultimately responsible for paying the interest that accrues during the deferment period, but any payments are not due during the deferment period. Thus, interest unpaid on a loan during deferment may be capitalized or added to the loan's principal balance, which may substantially increase it.

There are typically six ways to be eligible for a deferment of a federal student loan. These situations are generally based on facts involving current enrollment in school, economic hardship, and military service. These include:

  • During a period of at least half-time enrollment in college or career school;
  • During a period of study in an approved graduate fellowship program or in an approved rehabilitation training program for the disabled;
  • During a period of economic hardship (including service in the Peace Corps);
  • During a period of unemployment or inability to find full-time employment;
  • During a period of active duty military service during a war, military operation, or national emergency;
  • During the 13 months following the conclusion of qualifying active duty military service, or until you return to enrollment on at least a half-time basis, whichever is earlier.

Like most government programs, loan deferments are not automatic and must be requested by student loan debtors to their loan servicer. Student loans may have both short-term and long-term financial consequences and effects. At Loan Lawyers, our South Florida consumer rights and debt defense attorneys help individuals with problems related to student loans. For a no-risk, no-cost consultation, contact one of our South Florida consumer defense attorneys today by calling (888) FIGHT-13 (344-4813).