Deferment and FFELP and Direct Loans. If you are having trouble repaying your federal student loans, you should find out if you are eligible for a deferment. A deferment is a period of time during which no payments of loan principle are required to be made. Deferments are available for all types of FFELP and Direct Loans. Interest does not accrue on subsidized loans during periods of deferment. Interest on all other types of FFELP or Direct Loans accrues and is capitalized (that is, added to the outstanding principal balance) if it is not paid.
The federal government allows borrowers to obtain deferments only for very specific reasons. Typically, you may be eligible for a deferment under the following circumstances:
- economic hardship
- military deployment
- enrollment in school
- national service
To determine if you may be eligible for a economic hardship deferment, you can use this economic hardship calculator:
Students are only eligible for a certain period of deferments. Generally, the maximum deferment period for most types of deferment is three (3) years. However, that three (3) year period may not apply if you are a member of the military. If you are serving on eligible active duty and your period of service includes October 1, 2007 or begins on or after that date, your deferment period runs for the period of your service plus 180 days following the date you are demobilized. If you qualify, you can defer payments on all outstanding FFELP, Direct and Perkins loans. In addition, National Guard, Reserve and retired military members called to active duty service while enrolled at an eligible school (or within six months prior to their activation) may, as of October 1, 2007, receive a deferment on their FFELP, Direct and Perkins loans for up to 13 months following the end of their service.