You are eligible for student loan deferments only if you have not yet defaulted on your loans.
Deferments allow you to postpone paying back your loans in certain circumstances. This is an important option, particularly since interest does not accrue for subsidized federal loans during deferment periods. Interest does accrue on unsubsidized loans. If you can afford it and interest is accruing during a deferment, you should consider paying to avoid a bigger balance after the deferment is over.
Deferment options for federal loans vary depending on the type of loan and date the loan was incurred. You can get the following deferments for most loans:
- In-school deferments for at least half-time study;
- Graduate fellowship deferments;
- Rehabilitation training program deferment;
- Unemployment deferment not to exceed three years;
- Economic hardship deferment, granted one year at a time for a maximum of three years;
- Cancer treatment deferment, and
- Military deferment.
There are a number of other deferments available in the Perkins program only.
You can request a deferment form from your loan servicer. Selected forms are also available here and on the Department of Education web site. You should contact your guaranty agency or school if you have a different type of loan. You should continue paying while your application is pending.
Economic Hardship Deferment
The economic hardship deferment is granted one year at a time for a maximum of three years.
The first three qualification categories are “automatic” as long as you can provide supporting documentation. These three categories are:
- Previous qualification for economic hardship deferment under another federal loan program.
- Receipt of federal or state public assistance benefits. This includes payments under a federal or state public assistance program such as TANF, SSI, Food Stamps, or state general public assistance.
- You qualify if you are serving as a Peace Corps volunteer.
You can also qualify based on your income you are working full-time or your monthly income does not exceed the larger of A) The federal minimum wage rate or B) 150% of the poverty line income for your family size and state. (In 2020, the poverty line for a family of two living in the 48 contiguous states is $17, 240).
Prior to July 1, 2009, there were two other income-based eligibility categories.
There are two ways to qualify for an unemployment deferment. The simpler way is to provide proof of eligibility to receive unemployment benefits. The other way is to show that you are diligently searching for full-time employment (defined as employment of at least thirty hours per week and expected to last at least three months). This second category requires you to certify that you are diligently seeking but unable to find full-time employment and in most cases that you are registered with a public or private employment agency. You may qualify under the second category whether or not you have been previously employed.
If you apply under the seeking full-time employment category, the initial deferment can be granted for a period that begins up to six months before the loan holder receives your request and can be granted for up to six months after that date. If you get the deferment based on your search for full-time employment and you want to extend it beyond the initial period, you must certify that you have made at least six diligent attempts during the preceding six month period to secure full-time employment.
Each unemployment deferment may last for up to six months. You must reapply to extend the deferment. If you are applying under the seeking full-time employment category, you must certify that you have made at least six diligent attempts to obtain full-time employment in the last six months. This deferment cannot be granted for a total of more than three years.