Deferment and Forbearance

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Overview

Deferment is a suspension of payment without interest accrual on the account. All deferments require the borrower to file appropriate certification in a timely manner. All deferment periods are followed by a renewed grace period of six months, after the end of the deferment period during which interest does not accrue.

In order to receive a deferment a borrower who requests deferment must provide the university with all the information and documents the school requires by the school's deadline as evidence that the borrower qualifies for deferment benefits.

Upon making a properly documented request to the University of Oregon, the borrower may defer making scheduled installment payments and will not be liable for any interest that might otherwise accrue during the following periods:

Deferment Types, 07/01/93 - CurrentDeferment Period
In-School Half-time or greater studentNo Limit
Graduate FellowshipNo Limit
Forbearance3 Years
Economic Hardship3 years
Seeking Full Employment3 Years
Rehabilitation trainingNo Limit
Internship or Residency2 years
Military ServiceNo Limit
Military Service Post Demobilization 6 Months
Active Duty Student 3 years

In-school

A borrower may defer repayment of a Perkins Loan if he or she is enrolled at least half-time in an eligible school.

Except for a program in dentistry, an in-school deferment may not be granted to a borrower who is serving in a medical internship or resi­dency program.

Internship/Residency

A borrower who is serving in a medical internship or residency program is not considered to be in school for deferment purposes and may not receive an in-school deferment on that Perkins Loan for the internship or residency program; however, the borrower is eligible for an internship deferment for up to two years.

While the borrower is serving an eligible internship, he or she may defer repayment for up to two years. Interest will not accrue during the internship deferment. An eligible internship is one that requires the borrower to hold at least a bachelor's degree before beginning the program.

The internship must also be required by a state licensing agency as a prerequisite for certification of the individual for professional practice or service. The borrower must provide the school certification from an official of the appropriate state licensing agency indicating that the successful completion of the internship is required by the state licensing agency as a prerequisite for certification for professional practice or service. The borrower must further provide a statement from the organization where the borrower will be an intern certifying:

* that applicants must hold a bachelor's degree to be admitted into the internship program;

* that the borrower has been accepted into the internship program; and

* the dates when the borrower is expected to begin and complete the program.

Graduate fellowship

A borrower may defer repayment if he or she is enrolled and in attendance as a regular student in a course of study that is part of a graduate fellowship program approved by the Department of Education, including graduate or postgraduate fellowship-supported study (such as a Fulbright grant) outside the United States.

Forbearance

Forbearance is usually a temporary postponement of payments. The borrower may alternatively request an extension of time allowed for making payments or the acceptance of smaller payments than were previously scheduled. Unlike deferment, interest continues to accrue during any period of forbearance.

Schools may grant forbearance to borrowers who are experiencing financial hardship, poor health, or for other acceptable reasons. For example, the Department of Education strongly encourages schools to grant periods of forbearance to borrowers who are serving in AmeriCorps. Also, the Department of Education may authorize periods of forbearance due to national military mobilization or other national emergency.

Borrowers must provide supporting documentation of the reason for forbearance. Both the borrower and the school must agree upon the terms of the forbearance.

Schools may grant the borrower forbearance for a period of up to one year at a time. The forbearance may be renewed, but the periods of forbearance collectively may not exceed a total of three years. A school may apply an authorized period of forbearance to begin retroactively (that is, to begin on an earlier date than the date of the borrower's request) if the borrower requests that the school do so and if he or she provides adequate documentation to support the request.

Hardship Economic

A borrower is entitled to an economic hardship deferment for periods of up to one year at a time, not to exceed three years cumulatively, if the borrower provides the school with satisfactory documentation showing that he or she is within any of the following categories:

  1. has been granted an economic hardship deferment for either a William D. Ford Federal Direct Loan or Federal Family Education Loan (see definition below in this section) for the same period of time for which the Perkins Loan deferment has been requested;

    The William D. Ford Federal Direct Loan (Direct Loan) Program includes Federal Direct Stafford/Ford (Direct Subsidized) Loans, Federal Direct Unsubsidized Stafford/Ford (Direct Unsubsidized) Loans, Federal Direct PLUS (Direct PLUS) Loans, and Federal Direct Consolidation (Direct Consolidation) Loans.

    The Federal Family Education Loan (FFEL) Program includes Federal Stafford Loans (both subsidized and unsubsidized), Federal PLUS Loans, and Federal Consolidation Loans.

  2. is receiving federal or state public assistance, such as Temporary Assistance to Needy Families (formerly, Aid to Families with Dependent Children), Supplemental Security Income, Food Stamps, or state general public assistance;
  3. is working full-time [fn1] and is earning a total monthly gross income that does not exceed 1) the monthly earnings of someone earning the minimum wage, or 2) 150% of the poverty line [fn2] for the borrower's family size.
  4. is not receiving total monthly gross income that is more than twice the amount in (3) above and that income minus an amount equal to the borrower's monthly payments on federal postsecondary education loans does not exceed the amount specified in (3) above;
  5. is serving as a volunteer in the Peace Corps. Deferment may be granted for Peace Corps service for periods longer than 1 year at a time, but these periods must not collectively exceed 3 years.
  • [fn1] a borrower is considered to be working full-time if he or she is expected to be employed for at least 3 consecutive months for at least 30 hours per week.
  • [fn2] The poverty guidelines are published annually by the Department of Health and Human Services. If a borrower is not a resident of a State identified in the poverty guidelines, the poverty guideline to be used for the borrower is the poverty guideline (for the relevant family size) used for the 48 contiguous States.

The current hourly minimum wage: http://www.dol.gov/dol/topic/wages/minimumwage.htm

Annual poverty line guidelines: http://aspe.hhs.gov/poverty/14poverty.cfm

Seeking full-time employment

A borrower may defer repayment on a Perkins Loan for up to three years, regardless of disbursement date and contrary provisions on the promissory note, if the borrower is seeking and unable to find full-time employment. Schools may determine the documents the borrower must provide to apply for this deferment.

To receive deferment for enrollment in a graduate fellowship program, the borrower must provide certification that he or she is engaged in full-time study in an approved graduate fellowship program (or has been accepted by the program).

Rehabilitation training

A borrower may defer repayment if he or she is enrolled in a course of study that is part of a Department of Education approved rehabilitation training program for disabled individuals.

To receive this deferment, the borrower must provide the school with certification that:

  • the borrower is receiving, or scheduled to receive, rehabilitation training from the agency;
  • the agency is licensed, approved, certified, or otherwise recognized by a state agency responsible for programs in vocational rehabilitation, drug abuse treatment, mental health services, or alcohol abuse treatment; or by the Department of Veterans Affairs; and
  • the agency provides or will provide the borrower rehabilitation services under a written plan that (1) is individualized to meet the borrower's needs; (2) specifies the date that services will end; and (3) is structured in a way that requires substantial commitment from the borrower.

A substantial commitment from the borrower is a commitment of time and effort that would normally prevent the borrower from holding a full-time job either because of the number of hours that must be devoted to rehabilitation or because of the nature of the rehabilitation.

Military service

A borrower who is serving on active duty or performing qualifying National Guard duty in connection with a war, military operation, or national emergency does not need to pay principal or interest on Perkins, NDSLs, and Defense Loans.

Military service, Post Demobilization

The Military Service deferment period ends 180 days after the borrower's demobilization date for the eligible active duty or National Guard service.

Active Duty Student

The College Cost Reduction and Access Act (CCRAA) created a new military deferment for borrowers enrolled in an eligible postsecondary school. Effective October 1, 2007, borrowers who are members of National Guard or Armed Forces Reserve, and members of the Armed Forces who are in retired status, are eligible for a 13 month period of deferment on repayment of their Perkins loans following the completion of their active duty military service if they were enrolled in a postsecondary school at the time of, or within six months prior to, their activation. If the borrower re-enrolls in postsecondary school prior to the expiration of the 13-month period, the deferment ends on the date the student re-enrolls.

Unlike the military service deferment described above, students receiving the active duty student deferment need not be activated during a war, national emergency, or other military operation.

For purposes of the active duty student deferment, "active duty" has the same meaning as in Section 101(d) (1) of Title 10, United States Code, but does not include active duty for training or attendance at a service school/academy. Members of the National Guard may qualify for this deferment for Title 32 full-time National Guard duty under which a Governor is authorized, with the approval of the President or the U.S. Secretary of Defense, to order a member to State active duty and the activities of the National Guard are paid for by federal funds; or for State active duty under which a Governor activates National Guard personnel based on State statute or policy, and the activities of the National Guard are paid for by State funds. Many borrowers may also be eligible for the military service deferment, and a student may receive both deferments if eligible. If a student receives both, the overlapping periods of deferment will run concurrently.

Deferments for Loans Made Before July 1, 1993

Contact the university regarding deferment periods for these deferment types.

Parenting

A borrower may defer repayment (and interest will not accrue) during a period of up to one year if the borrower is a mother of a preschool-age child, provided the mother is working (or going back to work) at a salary that is no more than $1.00 above the minimum hourly wage.

A borrower may also defer repayment for up to six months if the borrower is pregnant, or if he or she is taking care of a newborn or newly adopted child. This deferment is called a parental leave deferment. The borrower must be unemployed and not attending school and must apply for deferment within six months of leaving school or dropping below half-time status.

Hardship

Loans disbursed before July 1, 1993; eligible for an additional type of hardship deferment, which is separate and different from an economic hardship deferment. A borrower may defer repayment for hardship, as determined by the school (for example, if the borrower is facing a prolonged period of illness or unemployment). A borrower may qualify for unlimited deferments due to hardship.

Interest will continue to accrue during the hardship deferment. Also, hardship deferments do not have post-deferment grace periods.

Internship/Residency

A borrower who is serving in a medical internship or residency program is not considered to be in school for deferment purposes and may not receive an in-school deferment on that Perkins Loan for the internship or residency program; however, the borrower is eligible for an internship deferment for up to two years.

The internship must also be required by a state licensing agency as a prerequisite for certification of the individual for professional practice or service. The borrower must provide the school certification from an official of the appropriate state licensing agency indicating that the successful completion of the internship is required by the state licensing agency as a prerequisite for certification for professional practice or service. The borrower must further provide a statement from the organization where the borrower will be an intern certifying:

  • that applicants must hold a bachelor's degree to be admitted into the internship program;
  • that the borrower has been accepted into the internship program; and
  • the dates when the borrower is expected to begin and complete the program.

Deferment Exclusive to Perkins Loans Made Before July 1, 1993, and NDSLs Made Between October 1, 1980, and July 1, 1993

Contact the university regarding deferment periods for these deferment types.

The deferments in this section are only available for Perkins Loans made before July 1, 1993, and NDSLs made between October 1, 1980 and July 1, 1993. See the subsections following this list for more details on these deferments and for information on additional deferments.

A borrower may defer repayment for up to three years and interest will not accrue while he or she is:

  • a member of the U.S. Army, Navy, Air Force, Marines, or Coast Guard;
  • a member of the National Guard or the Reserves serving a period of full-time active duty in the armed forces;
  • an officer in the Commissioned Corps of the U.S. Public Health Service;
  • (for Perkins Loans made before July 1, 1993, only) on full-time active duty as a member of the National Oceanic and Atmospheric Administration Corps;
  • a Peace Corps or AmeriCorps*VISTA (under Title I, Part A of the Domestic Volunteer Service Act of 1973) volunteer or comparable service (see below);
  • temporarily totally disabled or unable to work because he or she must care for a spouse or other dependent who is so disabled;
  • (for Perkins Loans made before July 1, 1993, only) a working mother (up to 12 months deferment); and
  • (for Perkins Loans made before July 1, 1993, only) a new parent (up to six months deferment).