Deferment
Every graduate has a grace period of at least six months, but you can also defer your loans. A deferment is a temporary suspension of repayment on your principal loan balance for specific period of time. You do not have to pay interest on subsidized loans during deferment, but you must pay it on unsubsidized loans. If you do not pay the interest on your unsubsidized loans, it will be added to your balance and you will pay more money. You qualify for a deferment under the following conditions:
- Enrolled in school at least part time
- Studying in an approved graduated fellowship program or in an approved rehabilitation training program for the disabled
- Unemployed(Deferment up to three years)
- Economic hardship{Deferment up to three years (including Peace Corps)}
- A member of US Armed forces reserve or the National Guard. You must be called or ordered to active duty while in school at least part time or within six months of having been enrolled at least half-time.
If you do not qualify for deferment, you can apply for a forbearance. A forbearance allows you to postpone or reduce your monthly payments for a specific time period due to financial hardship or illness. You are responsible for paying the interest on both subsidized and unsubsidized loans. If you do not pay the interest, it will be added to your principal balance and you will pay more money.
Along with deferment and forbearance, there are also loan forgiveness programs.
Teacher Loan Forgiveness Program
You can get up to $17,500 of your loans cancelled under this program! You have to teach in a low income elementary or secondary school for five consecutive years. There are some conditions. To receive up to $17,500 in loan forgiveness, you must be a math or science teacher in a secondary school or a special education teacher. You receive up to $5,000 in loan forgiveness if you are an elementary teacher or secondary teacher that teaches a subject that relates to your major. If you are an aspiring educator or thinking about going into education, take advantage of this program. The world needs more great teachers.
Public Service Employees
With this program, your remaining balance can be forgiven after you made 120 payments. Only federal Direct Loans qualify for this program, but you can have your other federal student loans consolidated into a Direct Loan to take advantage of this program. You qualify for this program if you are employed full time in the following sectors:
- A federal, state, local, or tribal government organization, agency, or entity including public schools, colleges and universities
- A public child or family service agency
- A 501(c)(3) non-profit organization
- Tribal college or university
- A private organization that is a not for-profit business, labor union, partisan political organization, or religious organization provides the following public services
- Emergency management
- Military service
- Public safety, public health, public education, or public library services
- Law enforcement
- Public interest law services
- Early Childhood services
- Public service for individuals with disabilities and the elderly
- School library or other school-based services
All information presented only relates to Federal student loans and is provided by the Department of Education. For more information about these programs, visit studentaid.ed.gov. If you have private student loans, contact your lender(s).
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