Questions about Student Loan Deferments and Forbearances

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By Mark Kantrowitz

June 17, 2020

During our webinar about Student Loans 101 (Borrowing), participants asked dozens of questions. Here are the answers to questions on borrowing student loans. These are answers to questions about deferments and forbearances.

Considering a deferment? Use our Cost of Deferment Calculator to evaluates the impact of interest capitalization at the end of a deferment or forbearance on the monthly loan payment and the cost of the loan, assuming that the loan payments are re-amortized after the deferment or forbearance.

Are federal loans to parents deferred while the student is in school?

Yes. Since July 1, 2008, parents can choose to defer Federal Parent PLUS Loans while the student is enrolled at least half-time in college and for six months afterwards. Otherwise, Parent PLUS loans enter repayment within 60 days after full disbursement. Interest accrues during the deferment period and will be capitalized at the end of the deferment period.

Are private loans to parents deferred while the student is in school?

Yes, most private student loans will defer repayment while the student is in school and for 6 months after graduation. However, interest will continue to accrue during the in-school period and may be capitalized as frequently as monthly.

Also, some private student loans have limits on the length of the in-school deferment period, ranging from 24 months to 96 months. The most common limits are 48 months and 60 months. 

Are some private lenders offering forms of forgiveness (i.e. suspending payments for 6 months) because of COVID-19?

Some private lenders are offering a 90-day forbearance on private student loans. The obligation to make payments is suspended during a forbearance, but interest continues to accrue and will be capitalized at the end of the forbearance period. This forbearance is not automatic. You must contact the loan servicer to ask for it. On a case-by-case basis, private lenders may offer additional flexibilities to some borrowers.

The Heroes Act, which has passed the House but is stalled in the Senate, would provide a payment pause on federal and private student loans through September 30, 2021. It would also provide up to $10,000 in loan forgiveness on federal and private student loans, but only for borrowers who were economically-distressed as of March 12, 2020. 

A good place to start:

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