Student Loan Options: When You Can’t Pay Up

deferment or forbearance on student loans

Those experiencing problems paying student loans have access to a lot of information and several options to consider. The National Student Loan Data System (NSLDS) offers financial aid reviews, loan status reports and many answers to frequently asked questions. But when it’s time to take action, a borrower must be educated on the choices. Two options to consider include delaying or reducing payments using a deferment or forbearance. These options allow those with student loan debt to hold or reduce payment amounts during temporary, extenuating circumstances such as the loss of a job, service in the military, or illness. These options also apply to students who have returned to school. Many of those with student loan problems are unaware of these options. But they can help out in a pinch.

Student Loan Deferment

student loan deferment option

Deferments allow for a delay in payments completely or a reduction in payments to cover the interest alone for the duration of the situation. Qualifying can be automatic under certain circumstances, which accelerates the deferment approval.

Student Loan Forbearance

This type of payment delay comes with less stringent requirements than deferment. But the lender will most likely require documentation to confirm the situation. There are two types of forbearance: discretionary and mandatory. Discretionary is based on the judgment of the lender. With a mandatory forbearance, if the criteria are met, the lender is required to offer it.

Pros and Cons of Each


Both deferment and forbearance may allow for a complete postponement of payments. But the choice made should be based on the particular situation. Deferments can apply to students returning to school at least half time and come with an automatic approval criteria. Forbearance offers neither. But the advantage of a deferment is that it does not accrue interest, so the borrower pays nothing more in the long run. Forbearance accrues interest, and that adds up to the borrower paying more in the long run.

Steps to Take

A former student should first look to the loan servicer directly. If forbearance is an option, they should be able to provide you with the proper forms you will need. If the borrower finds contacting the loan servicer or lender difficult, they can download various deferment forms based on the rationale of the request. The borrower may also download forbearance forms. Because student loans are overseen by the government, they can offer a wealth of information on student loan information.

Above all else, borrowers should be sure to continue making loan payments until they have acquired a deferment or forbearance. Those who have defaulted on their loans are not eligible for these options. Borrowers having problems or anticipating problems making loan payments should contact the loan servicer or lender quickly to discuss available options.