student loan repayment manual table of contents - Tufts University

Deferment11A student loan borrower is eligible for a deferment if they meet certain conditions that qualify them topostpone repayment of their loans while meeting those conditions. Like a grace period, deferment time isusually exclusive of total repayment time. For example, a student having just graduated dental school andqualifies for deferment over a 2-year period of time on a loan that has a maximum 10-year repaymentperiod, will still have 10 years to repay that loan after their deferment period expires. In most cases, theborrower is required to complete a deferment form seeking approval from their loan servicer (most can beobtained from the loan servicer’s website). There are different types of deferment forms depending on thetype of deferment. Borrowers need to contact ALL of their loan servicers for the appropriate defermentform. Borrowers must contact their private education loan lender/servicer to determine their repaymentoptions and the availability for deferments, since they oftentimes differ from federal or institutional loanprograms.Don’t make the mistake of assuming, because you’re allowed deferment on one type of loan, that you’reeligible for that same deferment benefit for other loans. Deferment provisions differ by loan program andcan differ based on the date the loan was received. Also, don’t make the assumption that all yourlenders/loan servicers “talk” with one another. They definitely do not communicate with one another. Inthe event that you have Stafford Loans from 3 different lenders/loan servicers, you need to complete adeferment form for each loan servicer for each type of loan.There is only one occasion where a certain type of deferment may be placed automatically on a borrower’sloan where it is not initiated by any party. That deferment applies to the post-enrollment defermentavailable on Grad PLUS loans. Loan servicers have been given the authority to apply a 6-month postenrollmentdeferment on a borrower’s account once they cease being enrolled at least half-time, graduatedor withdrawn without the borrower’s authorization. Most loan servicers assume borrowers prefer to havethis deferment applied but borrowers may contact their Grad PLUS servicers to indicate they do not wish tohave this deferment applied. One reason a borrower may not want this post-enrollment deferment isbecause it increases the frequency of when unpaid interest capitalizes.Colleges and universities in the US must report enrollment and expected graduation dates for each of theirstudent populations to the National Student Loan Clearinghouse. Loan servicers will “sweep”clearinghouse data for data matches with student loans they may be servicing. Normally, this is how an inschooldeferment is applied on federal student loans and is one of the few types of deferments that do notrequire the borrower to complete a paper deferment form. However, schools are only required to reportenrollment data to the clearinghouse a minimal number of times during the normal 9-month school year;traditionally September through May. As a result, borrowers may not be able to fully rely on schoolsreporting their enrollment to their loan servicers and may need to complete an actual paper in-schooldeferment form(s) for all of their loan servicers until such time their school provides enrollment data to theclearinghouse.In most cases the borrower is required to “expire” or use up all their grace period time before the defermentstatus is placed on their loan accounts. For example, if the borrower is applying for an Economic HardshipDeferment to defer his Stafford/Direct Loans payments, he would be required to expire (utilize) his entiregrace period first before his lender can determine his eligibility for deferment. This would mean uponexpiration of the Economic Hardship Deferment, the borrower would enter repayment. He would not haveany grace period left to utilize at that point.