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Loan Deferment & Forbearance
If you’re having trouble paying your student loan, there may be temporary options that can help. These options can help relieve the stress of monthly student loan payments for a certain period of time. So you can manage your budget and protect your credit rating during times of hardship or other situations.
Don’t wait to look into these options. The most important thing to do is to take action now to avoid going into student loan default—which can have serious consequences on your credit and your income.
In certain situations, the U.S. Department of Education will allow you to defer (or postpone) your federal education loan payments for a period of time. This means you do not have to make payments during that time.
There are several situations that may make you eligible for a loan deferment. To apply for a deferment on a VSAC loan, download the application that matches your situation and follow the application instructions:
- In-School Deferment Request (PDF): If you are enrolled at least half time in college or in an eligible career training program
- Economic Hardship Deferment Request (PDF): If you receive public assistance, serve in the Peace Corps, or if your monthly income is less than 150% of the poverty guidelines for your family size and state of residence. See application for more details.
- Unemployment Deferment Request (PDF): If you are currently eligible for unemployment benefits or are diligently seeking, but unable to find, full-time employment
- Graduate Fellowship Deferment Request (PDF): If you are enrolled full time in a graduate fellowship program
- Rehabilitation Training Deferment Request (PDF): If you are enrolled in a program for physical or vocational rehabilitation or drug, mental health, or alcohol treatment
- Military Service and Post-Active Duty Student Deferment Request (PDF): If you are on, or have been called to, active duty during a war, military operation, or other national emergency
- Cancer Treatment Deferment Request (PDF): If you are receiving cancer treatment
Typically, interest won’t accrue (build up) on your subsidized loans during a deferment. Interest will always accrue on your unsubsidized loans during a deferment, with the exception of Federal Unsubsidized Stafford Loans during periods of Cancer Treatment Deferment. For more information about deferments, visit the U.S. Department of Education’s Federal Student Aid website. For more information about federal student loan benefits for members of the U.S. Armed Forces, download this guide from the Department of Education (PDF).
If you do not qualify for a deferment, but cannot make your monthly loan payments, you may be able to get a forbearance from your lender.
- How it works: With this option, you may be able to temporarily postpone your loan payments—or pay smaller monthly payments—for up to 12 months. Once approved, the forbearance will eliminate any delinquency that currently exists on the account, but does not remove any past-due information your lender may have already reported to the national credit bureaus. So it will not change your credit history.
- Benefits: You can get temporary relief from paying your student loans and avoid default.
- You’ll pay more over time: Interest continues to accrue during the forbearance period. And you are responsible for paying the additional interest—even on subsidized loans. If you do not pay at least the interest during the forbearance period, the unpaid interest will be added to your principal balance—and you’ll end up paying a lot more for your loan over time.
- Your regular monthly payment may increase: When interest is added to the principal at the end of the forbearance, this increases the total amount that must be repaid. This means your monthly payment amount may need to increase to ensure your loan can be paid off in your remaining term.
- Periods of forbearance don’t count towards forgiveness: If you are pursuing loan forgiveness (for example, forgiveness associated with the income-based repayment plan), periods of forbearance do not count toward the forgiveness period.
There are 2 types of forbearance:
- Discretionary forbearance: You can request a discretionary forbearance from your lender in times of financial hardship or illness. Your lender decides whether to grant you the forbearance or not.
- Mandatory forbearance: You can request a mandatory forbearance for federal loans in specific situations. If you are eligible, your lender must grant you the forbearance.
To learn more about forbearances—including the situations that qualify for a mandatory forbearance— visit the U.S. Department of Education’s Federal Student Aid website.
Unfortunately, there are companies that prey on people who need help with their student loans—and try to make money off of them. You should never pay for help with lowering or deferring your student loan payments. The federal government or your private lender will help you for free.