Sometimes it seems like things would be so much easier if you could just suspend paying for some of your bills for a few months…and without consequences.  Unfortunately, in most cases, you have to be facing some serious financial trouble in order to qualify.  If you are, one of the first payments you might look at is your student loan.  You might qualify for a deferment, but should you get one?

With a student loan deferment, your payments are suspended for a set period of time that your lender establishes.  If you have a subsidized Stafford loan, you also have the good fortune of suspended interest charges, so the loan amount will not increase during the time that you won’t be making payments.  However, most private student loans will continue to accrue interest, and that could increase the length of time that it will take you to pay off the loan.

Deferment Qualifications

There are a few different ways to qualify for a deferment.  First, as long as you are attending school at least part-time (and the definition of part-time may vary depending on your school and your specific loan), your payments can be deferred.  (In some cases, that’s a given until you graduate.)  After graduation, you might run into financial trouble, and you might qualify for an economic hardship or unemployment deferment.  For economic hardship, you must prove that the ratio of your payments versus your income is at a certain point determined by your lender.  To receive an unemployment deferment, you must show that you are actively seeking employment during the suspension period.

You could also qualify for a disability or family leave deferment if you are unable to work due to illness or a severe injury, if you are caring for your spouse or child that is experiencing an illness or injury, or if you are pregnant or taking care of your newborn and cannot attend work or school.  Your last option for qualification is a public service deferment—you are in the military, Peace Corps, or serving an approved tax-exempt organization as a volunteer.

Deferments are for Emergencies

Apart from the education deferment while you are still in school, all of these options require a substantial financial issue before you can be approved, so only consider a deferment when it is absolutely necessary.  It will be listed on your credit report, and the loan debt will still be included with your total debt if you apply for credit or other loans during the deferment.

If a deferment is a necessary option for you, make sure you understand all of the terms set forth by your particular lender, especially if they state that interest will still accrue in the meantime.  If so, consider making payments on that interest during the deferment.  Not only will it be more affordable than your entire monthly payment had been, but it will prevent the size of your loan from growing exponentially while you try to get your finances in order.  You don’t want find yourself worse off when the deferment is over.