Student Loan Deferment and Student Loan Forbearance

Student loan deferment and student loan forbearance are often confused with the many types of student loan forgiveness programs that a borrower might come across.  These two tools can be lifesavers for a borrower who is having trouble making his or her student loan payments.

However, these tools are not the same as student loan forgiveness. First, student loan deferment and student loan forbearance will ultimately not result in automatic student loans forgiveness, student loan repayment or student loan cancellation. Second, these tools can, and generally do, extend the life of the student loan repayment period and in some cases, the total amount of the student loan to be repaid.

With that out of the way, how can student loan deferment or student loan forbearance help you? If you are having trouble making student loan payments, applying for a deferment may be one option.

Student Loan Deferment

A student loan deferment does just that – it defers student loan payments for a set period of time.  During that time, the borrower is not required to pay either the student loan principal or the student loan interest.  Depending on the type of loan you have, and the type of deferment you are looking at, the federal government may also pay the interest on your student loan during the deferment period.

While some student loan deferments may be automatic, the vast majority are not. You have to apply for a student loan deferment and meet certain requirements before you will be accepted for this temporary delay in payments.

The U.S. Department of Education can provide you with detail about various student loan deferment options that are available for federal student loans. Private loans usually do not have student loan deferment options, however, many student loan companies now offer student loan deferment options. If you are interested in a student loan deferment, you should contact your student loan servicer for Federal Direct and FFEL loans or the school you attended when you received your student loan if you are requesting a student loan deferment for a Perkins loan.

Student Loan Forbearance

The terms of the student loan forbearance process are usually, but not always, tougher than those granted with a student loan deferment.  You might apply for a student loan forbearance if you are having trouble making your monthly student loan payments, but you do not qualify for a student loan deferment, usually due to illness or financial hardship.

While you can generally (although not always) apply for a student loan deferment whenever you qualify for as long as you qualify, most private student loan lenders have a limit on the amount of time that they will allow the loan to be in student loan forbearance. In certain very limited circumstances, detailed by the U.S. Department of Education, you may be eligible for a mandatory forbearance.  If that is the case, your lender must grant you the forbearance.

Unlike student loan deferment, you will accrue student loan interest on any student loans in forbearance (including subsidized student loans).  You may choose to pay this student loan interest while your student loan is in forbearance, but you are not required to do so.

The U.S. Department of Education can help inform you if you qualify for a student loan deferment or a student loan forbearance.   But remember – if you choose to apply for either of these options, be sure you have been approved before you stop making payments.  You risk defaulting on your student loans if you stop paying prior to approval.

Remember – before you make the call to apply for student loan deferment or student loan forbearance, there are other options to make student loan repayment more manageable, while still paying off student loan debt.

Make Lemonade’s Student Loan Repayment Guide and Student Loan Refinancing Guide both can help you understand what other options might be available to you.


Best Student Loan Refinancing For 2018

Lender
Rates (APR)
Minimum Credit Score

Overview

Variable Rates:2.57% - 5.87%
Fixed Rates:3.25% - 6.32%
Average Savings:$21,810
Minimum Credit Score:None
Minimum Income:None
Fees:None

Details

Eligible Loans:Private & Federal
Minimum Loan Amount:$45,000
Loan Terms:5-20 years
Borrower Residency:All States except AL, KY, MS, VT
Unemployment Protection:Yes
Co-signer Option:Yes
2.56% - 7.40%
Good or Excellent

Overview

Variable Rates:2.56% - 7.40%
Fixed Rates:3.25% - 7.13%
Average Savings:$15,767
Minimum Credit Score:Good or Excellent
Minimum Income:None
Fees:None

Details

Eligible Loans:Private or Federal
Minimum Loan Amount:$5,000
Loan Terms:5, 7, 10, 15, 20 years
Borrower Residency:All states
Unemployment Protection:Yes
Co-signer Option:Yes

Overview

Variable Rates:2.58% - 7.96%
Fixed Rates:3.15% - 8.12%
Average Savings:$15,270
Minimum Credit Score:680
Minimum Income:$24,000
Fees:None

Details

Eligible Loans:Private & Federal
Minimum Loan Amount:$5,000
Loan Terms:5, 7, 10, 15, 20 years
Borrower Residency:All states, except ME, ND, NV, RI, WV
Unemployment Protection:Yes
Co-signer Option:Yes

Overview

Variable Rates:2.69% - 6.01%
Fixed Rates:3.09% - 6.69%
Average Savings:N/A
Minimum Credit Score:680
Minimum Income:$35,000
Fees:None

Details

Eligible Loans:Private & Federal
Minimum Loan Amount:$15,000
Loan Terms:5, 7, 10, 15, 20 years
Borrower Residency:All States
Unemployment Protection:Yes
Co-signer Option:Yes
1.95% - 3.95%
Excellent

Overview

Variable Rates:-
Fixed Rates:1.95% - 3.95%
Average Savings:-
Minimum Credit Score:Excellent
Minimum Income:-
Fees:-

Details

Eligible Loans:Private & Federal
Minimum Loan Amount:$40,000
Loan Terms:5, 7, 10, 15 years
Borrower Residency:Only for the residents of New York City, San Francisco, Palo Alto, Los Angeles, Newport Beach, San Diego, Portland (Oregon), Boston, Palm Beach (Florida) or Greenwich
Unemployment Protection:-
Co-signer Option:Yes

Overview

Variable Rates:2.75% - 7.25%
Fixed Rates:3.25% - 7.75%
Average Savings:N/A
Minimum Credit Score:680
Minimum Income:$75,000
Fees:-

Details

Eligible Loans:Private & Federal
Minimum Loan Amount:$5,000
Loan Terms:5 - 15
Borrower Residency:All states
Unemployment Protection:-
Co-signer Option:Yes

Overview

Variable Rates:2.80% - 5.90%
Fixed Rates:3.37% - 7.02%
Average Savings:$20,200
Minimum Credit Score:680
Minimum Income:None
Fees:None

Details

Eligible Loans:Private & Federal
Minimum Loan Amount:$5,000
Loan Terms:5, 7, 10, 15, 20 years
Borrower Residency:All states
Unemployment Protection:Yes
Co-signer Option:Yes

Overview

Variable Rates:3.48% - 7.26%
Fixed Rates:3.50% - 7.28%
Average Savings:$20,221
Minimum Credit Score:700 (670 with a co-signer)
Minimum Income:$42,000 solo or combined with spouse; $25,000 with a co-signer
Fees:None

Details

Eligible Loans:Private & Federal
Minimum Loan Amount:$7,500
Loan Terms:5, 8, 12, 15 years
Borrower Residency:All states
Unemployment Protection:Case by case
Co-signer Option:Yes

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