FINANCIAL AID
Deferment and Forbearance
Under certain circumstances, you can receive periods of deferment or forbearance
that allow you to postpone loan repayment. These periods don’t count toward
the length of time you have to repay your loan. You can’t get a deferment or
forbearance for a loan that is already in default.
Deferment
A deferment is a period of time during which no payments are required and interest does not accrue (accumulate), unless you have an Unsubsidized Stafford Loan. In that case, you must pay the interest.
Qualification for Deferment
The most common loan deferment conditions are enrollment in school at least half-time, inability to find full-time employment (for up to three years) and economic hardship (for up to three years).
Deferment for Active Military Service
An active duty military deferment is available for loans first disbursed on or after July 1, 2001. The deferment may not exceed three years and is available only for periods when the borrower is serving on active duty during a war or other military operation, or national emergency or is performing qualifying National Guard duty under the same circumstances. Therefore, not all active duty military personnel are eligible for this new deferment.
Loan Deferment Request forms should be completed in full and submitted to
the Registrar, Betty Burns. Students must provide the address where the Deferment
Request is to be returned.
Betty Burns’ office is located in the Murray Center, Room #206. She can be
reached by calling 812/749-1237, Monday—Friday, 8:00a.m. to 4:30p.m. |
Forbearance
If you temporarily can’t meet your repayment schedule but you’re not eligible for a deferment, your lender might grant you forbearance for a limited and specific period of time. Forbearance occurs when your lender or loan-servicing agency agrees to either temporarily reduce or postpone your student loan payments. Interest continues to accrue (accumulate), however, and you are responsible for paying it, no matter what kind of loan you have.
Generally, your lender can grant forbearance for periods up to 12 months at a time, for a maximum of three years. You’ll have to provide documentation to the lender to show why you should be granted forbearance. The lender must send you a notice confirming the terms that were agreed to and record them in your file.
Applying for Deferment or Forbearance
Receiving deferment or forbearance is not automatic. You or your parents must apply for it.
- Federal Perkins Loans- Contact the school that made your loan or the school’s servicing agent.
- Direct Loans (includes Direct PLUS Loans)- Contact the Direct Loan Servicing Center at: 1-800-848-0979, TTY users should call 1-800-848-0983, or go to: www.dl.ed.gov.
- FFEL Loans (includes FFEL Plus Loans)- Contact the lender or agency holding your loan.
Regardless of which type of federal student loan you have, you must pay the interest that accrues (accumulates) during any period of forbearance.
