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Extensions on Paying Back Student Loans: Types of Deferments

Borrowers of student loans are a growing number in today's economy, and the pressure to pay back these loans sometimes becomes too overwhelming for borrowers to make regular payments on time. In cases like these it is important to know that there are temporary solutions that allow borrowers to postpone paying back student loans. One solution is known as deferment.

Deferment is a temporary solution that allows those with student loans to postpone or reduce their Federal State loan payments, which, in turn, help a borrower to avoid falling into default. A deferment allows for payments not to be made presently, and interest on subsidized loans, such as, Perkins, Direct Subsided loans and Subsidized Federal Stafford loans, is paid by the government during the duration of the deferment.

In order to qualify for deferment one needs to fill out an application and provide documents supporting their need for a deferment on student loans. The types of deferments and their qualifications for eligibility are as follows.

To qualify for a Stafford Deferment, loans post 1993 require the borrower to be enrolled in school at least half-time, have a graduate fellowship, or if they are currently in a rehabilitation program. Also if a borrower is temporally disabled, or they are the care taker of a dependent that is disabled, then that person qualifies for Stafford deferment. Some other qualifications are if a borrower is unemployed, in military duty, or if they are facing an economic hardship. The starting time for a Stafford deferment is from when the circumstance took place, not from the date in which the borrower applied for the deferment.

One of the most common deferments is an Economic Hardship Deferment. It is issued every year, for a maximum of three years. To qualify for this type of deferment one must meet these requirements:

1. Previously received an Economic Hardship Deferment on another loan

2. Received federal or state public assistance

3. Peace corps volunteer

4. A full time, low-income earner

An unemployment deferment lasts up to three years and a can date back to the past six months. To qualify one needs to be registered with a public or private employment agency near their residence and they must be looking for work. Also proof of eligibility for unemployment benefits is needed.

Those who are on active duty or on service duty can qualify for Military Deferment. This type of deferment has no time limit, but proof of military duty is needs to be documented. Those who are post-active duty and enrolled in school can qualify for deferment too; however, it is only valid to them for up to 13 months after active military service.

Six months deferments on PLUS Loans are available for loans taken after July 2008. For these types of deferments Graduate PLUS are automatically granted PLUS deferment, but Parent PLUS need to request PLUS Deferment. Perkins Deferments are given if a borrower is still in school, a full-time teacher in certain schools, a full-time police or correction officer, currently unemployed, in the military, or facing an Economic Hardship.

Knowing that there are ways to postpone student loan debt from piling up is a relief to many who are struggling to pay back loans on time. Also keep in mind if you do ever find yourself financially overwhelmed in debt, to find an attorney who is experience in student loan debt, and who can guide you in the right direction of becoming debt free.

Works Cited

Cohen, Joshua R.I. Student Loan Law Workshop. Law Office of Joshua R.I. Cohen, LLC, 20 Apr. 2013.

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