There are two methods to postponing student loan payments if you find that you are having difficulty, or cannot make the payments. These are known as forbearance and deferment, and each has different requirements that must be met in order to qualify for these programs. In addition, many lenders also offer income sensitive repayment plans that may reduce the monthly student loan payments based on one's current level of income.
First, and most importantly, do not stop making student loan payments and allow the loan to go into default. In most cases, once the loan is in default status, you will no longer qualify for either method, and the lender has the right to demand full payment for the loan immediately. Keep making payments even as you are applying to postpone payments, and do not stop until you have been approved in writing for a deferment or a forbearance.
A deferment is the first method for postponing student loan payments. You will need to apply for this through your lender; in a deferment period, you may temporarily stop making payments on your loan, usually for no more than three years. Interest continues to accrue during this period, but the procedure varies depending on the type of the loan. For a subsidized federal loan, the interest that accrues during deferment will be paid by the government. Interest that accrues on an unsubsidized loan will be added to the principal amount of the loan, or capitalized.
You may be eligible for a deferment if you are unemployed or experiencing severe economic hardship, deployed in the military, or in school at least part time. If you are not eligible for deferment, or have used up your deferment time period, you may need to apply for a forbearance, which does not have the same requirements. Otherwise, a forbearance is quite similar to a deferment, and it also can reduce or stop your student loan payments.
One notable difference in a forbearance is that interest will accrue on both subsidized and unsubsidized loans, and you will be responsible for paying it. A forbearance may be able to stop payments altogether, or simply allow you to make interest only payments. If you stop student loan payments altogether, you will simply have the interest added onto the principal of the loan when you begin making payments again. You may apply for a forbearance as many times as necessary, and there are no specific eligibility requirements, as in a deferment. In addition, explore options for income sensitive repayment plans with your lender; some lenders offer the option of making reduced payments for the first two years after graduation, for example.
