Guide to Deferring Student Loans When Going Back to School

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How to defer student loans when going back to school How to apply for deferment What are the pros and cons of student loan deferment What are some options to student loan deferment.
What Is Student Loan Deferment?
Direct Unsubsidized Loans Unsubsidized Federal Stafford Loans, Direct PLUS Loans The unsubsidized portion of Direct Consolidation Loans The unsubsidized portion of FFEL Consolidation Loans.
Direct Subsidized Loans Subsidized Federal Stafford Loans Federal Perkins Loans The subsidized portion of FFEL Consolidation Loans.
If I Go Back to School, Will My Loans Be Deferred?
How to Defer Student Loans When Going Back to School
Pros of Deferring Student Loans
Frees up cash: If you need to make sure you have enough cash to handle daily expenses without having to worry about paying student loans, getting a deferment might make sense for your daily needs. No long application process: You don't have to endure a long application process when you go back to school because the school you attend will communicate it to your loan servicer. Some interest does not accrue: Certain loans do not accrue interest when deferred while you're in school. You do not need to pay the interest on Direct Subsidized Loans, Subsidized Federal Stafford Loans, Federal Perkins Loans, and the subsidized portion of FFEL Consolidation Loans.
Cons of Deferring Student Loans
No progress on loan payments: One of the biggest downsides of deferring payments on your student loans is that you don't make progress on paying your loans. Postponing the payments means that they will last that much longer. Interest accrues: Interest can accrue, or build, on your loan while you're in school. amount of interest could accrue on your unsubsidized loans. Direct Unsubsidized Loans, Unsubsidized Federal Stafford Loans, Direct PLUS Loans, the unsubsidized portion of Direct Consolidation Loans, and the unsubsidized portion of FFEL Consolidation Loans.
Other Options Besides Deferment
Student Loan Forgiveness
Public Service Loan Forgiveness (PSLF): PSLF is available for Direct Loans and allows you to forgive the remaining balance on your Direct Loans. You must have made 120 qualifying monthly payments under a qualifying repayment plan. You must also work full-time for a qualifying employer. FFEL Program loans and Perkins Loans may become eligible for PSLF if they are consolidated in the Direct Loan program. Teacher Loan Forgiveness: Teaching full-time for five consecutive and complete academic years in a low-income elementary, secondary, or educational service agency may allow forgiveness of up to $17,500 on your Direct or FFEL Program loans.
Continuing to Pay Student Loans
Refinancing Student Loans
For example, if you want to shorten the amount of time you'll pay on your loans, you can get a shorter loan term. On the other hand, if you're struggling to make your payments, you can lengthen your loan term.
If you refinance federal student loans, you'll forfeit federal loan benefits including deferment. You also forfeit income-based repayment plans and forbearance.
Student Loan Refinancing With Lantern
Frequently Asked Questions
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About the Author
Melissa Brock is a higher education and personal finance expert with more than a decade of experience writing online content. She spent 12 years in college admission prior to switching to full-time freelance writing and editing. Her work has appeared on Yahoo Finance, Entrepreneur, Investopedia, The Balance, FinanceBuzz, The Journal of College Admission, MarketBeat, College Finance, Rocket Mortgage, LeverageRx, Benzinga, Morty, Ally, and more.
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