A deferment is a period of time in which repayment of a principal loan balance is postponed. You must apply to your loan servicer for a deferment on a yearly basis.
During a deferment, if the loan is subsidized the federal government pays the interest charged. For federal unsubsidized Direct Loans and unsubsidized Consolidation Loans in deferment, you are responsible for the interest that accrues during the deferment period. If you have unsubsidized loans, when you re-enter repayment at the end of the deferment period, any unpaid interest is capitalized (added to the principal balance).
If you borrowed both a Supplemental Loan for Students (SLS) and a Stafford/Direct Loan, you can ask your loan servicer to align the repayment of these loans so that their repayment date begins on the same day. This usually will require the lender to grant six months of forbearance on your SLS since it does not have a grace period like Stafford/Direct Loans.
There are several deferment types. Consult your loan servicer to apply. Some options include:
Armed Forces Deferment - must be on active duty in the U.S. and must have agreed to serve for at least one year.
Economic Hardship Deferment - must receive federal or state public assistance or earn less than a federal minimum wage or exceed a federally defined debt-to-income ratio.
Graduate Fellowship Program Deferment - must be engaged in a full-time course of study in a graduate fellowship program.
Internship/Residency Program Deferment - must be engaged in an internship/residency program in an institute of higher education, hospital or health care facility and meet other specific criteria. NOTE: If you are eligible for an internship or residency deferment, do not file the deferment paperwork until just before your grace period expires. Filing for your deferment too early can shorten the length of your grace period.
Parental Leave Deferment - must be pregnant or caring for a newborn or newly adopted child; must not be working full time or attending school; must have been enrolled in school at least half time during the six months preceding the requested deferment period; and must meet other conditions.
Peace Corps Deferment - must have agreed to serve in the Peace Corps for at least one year and must meet other conditions.
Public Health Service Deferment - must be serving full time as an officer in the Commissioned Corps of the Public Health Service and meet other conditions.
Temporary Total Disability Deferment - must be unable to work and earn money or go to school for at least 60 days in order to recover from an illness or injury or care for a spouse or dependent with an illness or injury. The condition cannot have existed before you applied for the loan(s).