What is deferment?

Student loan deferment provisions

The provision for student loan deferment is one of the most important provisions of Federal education financing. The simple explanation: As long as the student qualifies, primarily by being enrolled as at least a half time student in an accredited college, university, or other post-secondary school, no repayment of their outstanding student loans is required. Repayment is deferred until the student completes their studies or otherwise becomes ineligible for the guaranteed deferment.

A student who has not completed his/her studies, but is no longer actively enrolled as a practicing student, will normally lose their deferment and need to begin loan repayment. But, as long as the student remains enrolled as a half time student, at a minimum, their deferment is guaranteed by their loan terms.

There are actually a variety of different ways to defer student loans, depending on which category the borrower is in. There are five primary deferment categories. You may qualify for student loan deferment if you:

• Are a student (minimum half time enrollment);
• Are in a graduate fellowship program;
• Are unemployed;
• Are enduring a "qualified" economic hardship; or
• Are in a "qualified" rehabilitation training program.

The ability to defer student loans until you become a productive and compensated member of the workforce is one of the most important benefits of using federally approved education financing.

Combine this ability with low interest rates (sometimes subsidized by the government) and liberal repayment terms, and you see why Federal student loans are often the “engine” that drives the post-secondary education world.