Loan Collection Office

Forbearance/Deferment

Forbearance

Forbearance is usually a temporary postponement of payments. The borrower may alternatively request an extension of time allowed for making payments or the acceptance of smaller payments than were previously scheduled. Unlike deferment, interest continues to accrue during any period of forbearance. The borrower may request to pay interest as it accrues during periods of forbearance, but the school may not require the borrower to do so.

Schools may grant forbearance to borrowers who are experiencing financial hardship, poor health, or for other acceptable reasons. For example, the Department strongly encourages schools to grant periods of forbearance to borrowers who are serving in AmeriCorps. Also, the Department may authorize periods of forbearance due to national military mobilization or other national emergency.

The forbearance is renewable at intervals of up to 12 months for periods that collectively do not exceed three years, under the terms and conditions specified in your promissory note. Forbearance is available for all loans made under the Federal Perkins Loan Program, regardless of when they were made.

PLEASE READ YOUR PROMISSORY NOTES CAREFULLY FOR SPECIFIC PROVISIONS.

Deferment

Under certain circumstances, a borrower is entitled to have the repayment of a loan deferred. During deferment, the borrower is not required to pay loan principal and interest does not accrue, (with the exception of forbearance/hardship deferments where interest does accrue)

After each deferment, the borrower is entitled to a post-deferment grace period of six consecutive months. Borrowers must provide the school with all the information and documents the school requires by the school's deadline.

Borrowers must immediately report any change in their deferment status to lending schools. The borrower must request deferment unless the borrower is engaged in service for which a borrower may qualify for loan cancellation.

Types of Deferment:

As of October 1, 2007, you may defer making scheduled installment payments, and will not be liable for any interest that might otherwise accrue on your Federal Perkins Loans, for an unlimited period during which you are serving on active duty during a war or other military operation or national emergency, or performing qualifying National Guard duty during a war or other military operation or national emergency, (as these terms are defined in 34 CFR §674.34(h) of the Perkins Loan Program regulations) and, if your active duty service includes October 1, 2007 or begins on or after that date, the 180-day period following the demobilization date for your service.

As of October 1, 2007, if you are serving on active duty military service on that date, or begin serving on or after that date for at least a 30-day period, you may defer making scheduled installment payments, and will not be liable for any interest that might otherwise accrue on your Federal Perkins Loans, for up to 13 months following the conclusion of your service and initial grace period if you are a member of the National Guard or other reserve component of the Armed Forces of the United States or a member of such forces in retired status (as these terms are defined in 34 CFR §674.34(i)(2)) and you were enrolled in a program of instruction at the time, or within six months prior to the time you were called to active duty. Active duty does not include active duty for training or attendance at a service school or employment in a full-time, permanent position in the National Guard unless you are reassigned from that position to another form of active duty service.

Deferments for all Perkins Loans In-school
A borrower may defer repayment of a Perkins Loan if he or she is enrolled at least half-time in an eligible school.
To receive an in-school deferment, the borrower must be enrolled as a regular student in an eligible institution of higher education or a comparable institution outside the United States approved by the Department for deferment purposes. A regular student is one who is enrolled for the purpose of obtaining a degree or certificate.

Graduate fellowship
A borrower may defer repayment if he or she is enrolled and in attendance as a regular student in a course of study that is part of a graduate fellowship program approved by the Department, including graduate or postgraduate fellowship-supported study (such as a Fulbright grant) outside the United States.

Rehabilitation training
A borrower may defer repayment if he or she is enrolled in a course of study that is part of a Department-approved rehabilitation training program for disabled individuals.

Seeking full-time employment
A borrower may defer repayment on a Perkins Loan for up to three years, regardless of disbursement date and contrary provisions on the promissory note, if the borrower is seeking and unable to find full-time employment.

Economic hardship
A borrower is entitled to an economic hardship deferment for periods of up to one year at a time, not to exceed three years cumulatively, if the borrower provides the school with satisfactory documentation.

Military service deferment
A borrower who is serving on active duty or performing qualifying National Guard duty in connection with a war, military operation, or national emergency does not need to pay principal or interest on Perkins, NDSLs, and Defense Loans. The deferment period ends 180 days after the borrower’s demobilization date for the eligible active duty or National Guard service.

Concurrent deferment
Schools must automatically defer loans during periods when the borrower is performing service that will qualify him or her for loan cancellation. Borrowers do not need to apply for concurrent deferment.
Schools may grant concurrent deferment for up to 12 months at a time. Concurrent deferment is available to all loans made under the Federal Perkins Loan Program, regardless of disbursement date and contrary provisions on the promissory note.

Deferments for Loans Made Before July 1, 1993 Parenting deferments
A borrower may defer repayment (and interest will not accrue) during a period of up to one year if the borrower is a mother of a preschool-age child, provided the mother is working (or going back to work) at a salary that is no more than $1.00 above the minimum hourly wage.

Hardship deferments
Loans disbursed before July 1, 1993 are eligible for an additional type of hardship deferment, which is separate and different from an economic hardship deferment.

Service Comparable to Peace Corps/AmericorpsVISTA Volunteer
A borrower is considered to be providing service comparable to Peace Corps or AmericorpsVISTA service.

Temporary Total Disability Deferment
An affidavit from a qualified physician is required to prove disability. A borrower is temporarily totally disabled if he or she is, due to illness or injury, unable to attend an eligible school or to be gainfully employed during a reasonable period of recovery.

Internship/Residency Deferment
A borrower who is serving in a medical internship or residency program is not considered to be in school for deferment purposes and may not receive an in-school deferment on that Perkins Loan for the internship or residency program; however, the borrower is eligible for an internship deferment for up to two years.

Deferment and Default
A borrower is not entitled to a deferment on a defaulted loan. If the borrower signs a new repayment agreement, however, a school may grant a deferment even if the school has “accelerated” the loan. The school would have to de-accelerate the loan before granting the deferment. The policy permitting deferments on defaulted loans applies to all requests for deferment received after February 3, 1988, regardless of the date the loan was made.

Deferment vs. In-School Enrollment Status
Sometimes the borrower transfers to another school—successfully maintaining at-least-half-time enrollment and therefore maintaining in-school status—but the borrower does not notify the school that he or she has transferred until after the initial grace period expires. In this situation, the borrower often requests deferment when he or she is actually entitled to continuation of his or her in-school status.

To ensure that your account is kept current, you must notify the Accounts Receivable Office of all changes in name, permanent address, phone number and email, and your entrance into or termination from any of the above.
Loan Office
351 West University Blvd
Admin 207 D
Cedar City, UT 84720
(435) 586-7728
Fax (435)865-8064