Deferments: the Federal student loan program provides deferments as a form a borrower debt relief. Deferments are an excellent loan management tool. Subsidized loans will have the interest paid while the loans are in the deferments; this will provide significant savings with a borrower, since unpaid interest which accrues during the deferments will be capitalized. This often leads to the “snowball” effect on student loans. The type the deferment available will depend upon when the loans or originated. (at this point, I would like to insert a chart like the one on mapping your future or provide a link to their page,
http://www.mappingyourfuture.org/money/deferments.htm.
Deferments must be submitted in writing on a specific form with accompanying documentation. Accuracy of the document and your documentation will be critical to a successful deferment request. Borrower should always maintained a file of the documents and deferment form submitted, and maintain contact with your servicer until the deferment has been approved in writing.
Forbearance: another option to temporarily suspend loan payment obligations. Regardless of the distribution date, interest will always accrue during the forbearance period. Due to capitalized interest, it is always in the borrower’s best interest to attempt to qualify for an adjusted Repayment Plan instead of seeking forbearance relief.
Federal Student Loan Forbearance differs from a deferment in several key areas: It is not a right but is granted at the discretion of the servicer. May be granted in increments from 1 month to 12 months at a time, with 36 months of forbearance for the lifetime of the loan. Forbearance may be requested verbally or in writing (recommended method for best documentation of forbearance request and time frame requested). Current Forbearance forms may be used for FFELP or Direct Loans, but older student loans may require specific forbearance forms from the specific servicer. There is also an Administrative Forbearance that the servicer may use in specific circumstances. An example would be to use the Administrative forbearance to suspend the delinquency count on a borrower at the point of default, providing the borrower with time to submit deferment papers and documents. Federal Perkins Loans have different Deferment and Forbearance guidelines. In general, grace will be a 9 month period, but the borrower should contact their school or Perkins Loan Servicer to obtain specific details or forms.
Deferments: the Federal student loan program provides deferments as a form a borrower debt relief. Deferments are an excellent loan management tool. Subsidized loans will have the interest paid while the loans are in the deferments; this will provide significant savings with a borrower, since unpaid interest which accrues during the deferments will be capitalized. This often leads to the “snowball” effect on student loans. The type the deferment available will depend upon when the loans or originated. (at this point, I would like to insert a chart like the one on mapping your future or provide a link to their page,
http://www.mappingyourfuture.org/money/deferments.htm.
Deferments must be submitted in writing on a specific form with accompanying documentation. Accuracy of the document and your documentation will be critical to a successful deferment request. Borrower should always maintained a file of the documents and deferment form submitted, and maintain contact with your servicer until the deferment has been approved in writing.
Deferments: the Federal student loan program provides deferments as a form a borrower debt relief. Deferments are an excellent loan management tool. Subsidized loans will have the interest paid while the loans are in the deferments; this will provide significant savings with a borrower, since unpaid interest which accrues during the deferments will be capitalized. This often leads to the “snowball” effect on student loans. The type the deferment available will depend upon when the loans or originated. (at this point, I would like to insert a chart like the one on mapping your future or provide a link to their page,
http://www.mappingyourfuture.org/money/deferments.htm.
Deferments must be submitted in writing on a specific form with accompanying documentation. Accuracy of the document and your documentation will be critical to a successful deferment request. Borrower should always maintained a file of the documents and deferment form submitted, and maintain contact with your servicer until the deferment has been approved in writing.
Loans disbursed beginning July 1, 1993. click here to see charts.
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