Hardship Deferment/ Forbearance on Federal Loans

Federal student loan deferment or forbearance is a period of time during which students can postpone payments on federal loans. Upon graduation, Federal Stafford loans go into a grace period where no payments are due for six months. However, previously consolidated Federal Stafford Loans and Federal Graduate PLUS Loans will enter into repayment status immediately upon graduation. In order for students to begin studying for the Bar Exam without worrying about having to make payments on these loans, it is important for students to ask their lender for either an economic hardship deferment or forbearance. The difference between the two options is explained below:

Economic Hardship Deferment
Graduates who have no income should apply for an economic hardship deferment. During the repayment term, a student is only eligible for an economic hardship deferment for up to three years. Students graduating from the Law Center should initially ask for a deferment to allow them time to study for the bar without having to worry about loan payments.  When using the deferment your payment will be suspended and this will NOT affect your credit.  You can “turn off” the deferment as soon as you wish to make payments.  The current Economic Hardship Deferment is only available until June 30, 2009.  After June 30, borrowers must use a new income-based eligibility that may result in a payment due based on your income.

Forbearance
Graduates who aren’t eligible for an economic hardship deferment but are unable to make their loan payments should apply for forbearance. Forbearance, like an economic hardship deferment, may be requested for up to three years during the repayment term. Subsidized loans in forbearance do accrue interest, unlike an economic hardship deferment, where subsidized loans do not accrue interest.

Note: If you borrow through a lender on our comparison chart, the Office of Financial Aid will send your deferment forms to your lender for you. Feel free to drop off your forms in our office during regular business hours.