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Managing Finances, Student Loans

Deferment: How To Know If You’re Eligible?

By Amanda Woidyla

If you have student loans, more than likely you’ve heard the term deferment. While it’s commonly used to describe any postponement or suspension of student loan payments, it’s actually unique from a forbearance.

Deferment-post
There’s a difference between a deferment and a forbearance

Yes, both allow you to postpone your student loan payments, but they’re different. A forbearance is granted at the discretion of your lender. Deferments are granted if you meet specific criteria. Another big difference is the interest accrual. If you have an eligible type of federal student loan, you may receive assistance with paying the interest that accrues while in deferment. The interest accrues during a forbearance regardless of the loan type. Then the unpaid balance is added to the principal balance after it ends. You can use Bank of North Dakota’s Interest Accrual Calculator to estimate the amount of interest that may accrue while payments are postponed.

Types of deferments

If you’re having a tough time making your payments or are unsure if you’ll be able to make regular payments due to a situation, you should contact your lender to see if you are eligible for a deferment. The federal student loan program has a variety available.

  • Cancer Treatment
  • Economic Hardship
  • Graduate Fellowship
  • In-School
  • Military Service and Post-Active Duty Student
  • Parent PLUS Borrower
  • Rehabilitation Training
  • Unemployment

If you have a student loan with Bank of North Dakota, you may be eligible for deferment if you are enrolled in school at least half time; have been accepted or recommended into an internship/residency program or a graduate fellowship program; or are on active-duty orders with the military.

How to request a deferment

Contact your lender and ask if you are eligible. If you are enrolled in school at least half time, your lender may be notified by the school and may automatically place your loan in deferment. However, this is one of the few times your lender will know you qualify, so you’ll need to contact them to make a request. You may also need to provide documentation for them to process it.

When requesting a deferment, keep in mind that you may not be making much progress in paying down your loan. Talk with your lender to see if it’s the right decision for you. For some people, an income-driven plan may be a better option. Also keep in mind that you are not required to make payments during a deferment. However, making any payments you can helps reduce the interest that may be accruing and that would be added to your principal balance later.

If you have student loan repayment questions, be sure to contact your lender, especially if you are having difficulty making your payments. You may also check out our Student Loan Answer Sheet for answers to some frequent student loan questions.

Amanda Woidyla

Amanda Woidyla is the University and Student Development Coordinator at BND, which is a long title for “I help students plan and pay for college and plan TO pay for college.” She coordinates College Application Month, North Dakota’s branch of the American College Application Campaign and REALLY likes public speaking. Outside of work, Amanda likes to ride bikes, do yoga and pet other people’s dogs.

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