Can You Defer Graduate Loans? | 07.23.10
If you recently earned a graduate degree and are having difficulty either finding a job, or making ends meet with an existing job, you may have the option to defer, or temporarily suspend, your graduate school loans. It is important to remember that deferment of your federal graduate loans is not a way to avoid paying the loans back altogether, but rather a way to avoid falling deeper into a financial abyss.
There are two most common types of deferment:
The first is Economic Hardship Deferment. You may qualify for this brand of deferment provided that:
- You are receiving payment under a federal or state public assistance program, such as Supplemental Security Income (SSI) or Food Stamps.
- You are serving as a Peace Corps volunteer.
- You are working full-time and your total monthly gross income from employment is less than the monthly minimum wage or 150% of your state’s poverty guideline.
The second type of deferment is loan forbearance. The primary difference between the two is that while in forbearance, interest will continue to accrue on the principal of your loan. That means your debt will continually increase while in deferment.
You are allotted 36 months of federal loan deferment entitlement regardless of which deferment you take advantage of and must reapply every 12 months.
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