Deferment and ForbearanceOne of the advantages of Federal Student Loans is that they allow you the opportunity to apply for and receive a deferment of your loans. Deferment allows you to postpone payment of your student loans if you meet certain eligibility requirements. There are several types of deferments available:
- Borrowers who are currently enrolled half-time or more in a degree seeking program
- Available as long as the student maintains enrollment.
Graduate Fellowship Deferment
- Borrowers who are participating in a qualifying Graduate Fellowship program.
- Check with program administrator to verify if the fellowship program qualifies.
- Available as long as borrower is participating in the program.
- Granted to borrowers who are in between employment.
- Borrowers must be actively seeking employment.
- Granted in six month increments.
While payment is not required during periods of deferment, interest will continue to accrue on the Unsubsidized portions of your student loans. You have the option to pay this interest, or let it accrue. You should always verify with either your lender, or the Student Financial Services office that you qualify for deferment.
Once you are a Medical Resident there may come a time when you do not qualify for a deferment. In such situations, you may have to utilize a forbearance. Forbearance is the temporary postponement or reduction of your monthly student loan payment obligation. During forbearance interest accrues on the entire balance of your student loans, including your subsidized loans.
Medical Residents are eligible for Mandatory Residency Forbearance during their residency years. Mandatory Residency Forbearance requires that your lender allow you to postpone payment of your loans during your additional years of training. While this alleviates your monthly payment obligation, interest is still accruing on the entire balance of your student loans and will be capitalized upon entering repayment.
We encourage you to keep accurate records concerning your student loans as this will help you to be aware of grace period, deferment, and forbearance end dates so that you can (re)apply for them in a timely manner. This will also assist you in avoiding unnecessary interest capitalization, delinquency and default due to missed payments on your student loan obligations.