Economic Hardship Deferment

Know how to file an economic hardship deferment request

When people have been laid off or have otherwise lost their jobs, you should know that federal student aid regulations permit deferments, or temporary suspensions of the requirement to repay loans, for up to three years.

If you have a Federal Perkins Loan, Federal Stafford Loan or Federal PLUS Loan, you may qualify for an economic hardship deferment for up to three years if you've experienced any of the following:

• Unemployment
• Inability to find full-time employment
• Service in the Peace Corps

Parents of undergraduate students who have taken out Federal PLUS Loans and who encounter economic hardships are also eligible for loan deferments. The same general rules that apply to Federal Stafford Loans will apply to PLUS loans.

A few things to keep in mind with an economic hardship deferment request

Remember, you must continue to make payments on your student loans until you have received formal notification that you have been granted a deferment. Failure to do so can result in student loan delinquency. Also remember that economic hardship deferments are only temporary, and are granted only for certain defined periods of time. When that period has elapsed, your loan repayment will remain your responsibility. And unless you have a subsidized federal student loan, you will be responsible for the interest that accrues on your loans even during the deferment period. If you do not pay that interest, it will simply be capitalized-that is, it will be included in the loan's principal.

Learn more about student loan deferment from Citizens Bank

For more information on deferments, or to get an economic hardship deferment request form, contact your lender or loan servicer.