Deferments

Economic Hardship
A borrower may be eligible for a deferment of up to one year at a time, not to exceed three years cumulatively, if the borrower provides the school with satisfactory documentation that he or she is within any of the following categories:

• You have been granted an economic hardship deferment for either a Federal Stafford or PLUS Loan for the same period of time for which the Federal Perkins Loan deferment has been requested. You must provide documentation of the deferment.
• You are receiving federal or state public assistance, such as Temporary Assistance to Needy Families (TANF), Supplemental Security Income, Food Stamps, or state general public assistance. You must provide documentation of these payments.
• You are working full-time and your monthly gross income does not exceed $1,436.25 ($1,793.75 for Alaska, $1,653.75 for Hawaii).
• You are serving as a volunteer in the Peace Corps. You are eligible for an economic hardship deferment for your full term of service as long as this period does not collectively exceed three years of this deferment option.

For purposes of qualifying under option 3 or 4 of the economic hardship deferment, a borrower is considered to be working full time if he or she is expected to be employed for at least three consecutive months for at least 30 hours per week.

To qualify for a subsequent period of deferment that begins less than one year after the end of the deferment described in option 3 or 4 above, the borrower must submit a copy of his or her federal income tax return if the borrower filed a tax return within the eight months preceding the date the deferment is requested.

Maximum Length: 36 months. Borrowers must reapply every 12 months

Seeking Full-time Employment
A borrower may defer repayment on a Federal Perkins Loan or NC State University Institutional Loan if the borrower is seeking and unable to find full-time employment. Borrowers must be registered with an employment agency and be able to provide proof of such registration.

Maximum Length: 36 months

Forbearance is usually a temporary postponement of payments. The borrower may alternatively request an extension of time allowed for making payments or the acceptance of smaller payments than were previously scheduled. Unlike deferment, interest continues to accrue during any period of forbearance.

The borrower must request forbearance in writing, providing documentation that supports the borrower’s claim that he or she is financially unable to make payments.

When the written request and supporting documentation have been received, if NC State University determines that the borrower qualifies, forbearance may be granted for up to one year at a time. The forbearance may be renewed, but the periods of forbearance collectively may not exceed a total of three years.

A lending institution must grant forbearance if the total amount the borrower is obligated to pay monthly on all Student Financial Assistance (SFA) loans is equal to or greater than 20% of the borrower’s total monthly gross income (defined as gross income received from employment and from other sources). The following documentation must be supplied to support the request for forbearance:

• Copies of the most recent monthly pay statement showing total monthly gross income and
• Copies of the most recent monthly statements showing the amounts owed on his or her SFA loans.

Forbearance may also be granted for one of the following reasons:

• Financial Hardship
• Extended illness
• Department of Education authorized periods due to local/national emergency or national military mobilization.
• Service in AmeriCorps
• Other acceptable reasons

A borrower may defer repayment if he or she is enrolled and in attendance as a regular student in a course of study that is part of a graduate fellowship program approved by the Department of Education, including graduate or postgraduate fellowship-supported study (such as a Fulbright grant) outside the United States.

To receive deferment for enrollment in a graduate fellowship program, the borrower must provide certification that he or she is engaged in full-time study in an approved graduate fellowship program (or has been accepted by the program).

To receive an in-school deferment, the borrower must be enrolled at least half-time as a regular student at an eligible institution of higher education or comparable institution outside the United States approved by the Department of Education for deferment purposes. A regular student is one who is enrolled for the purpose of obtaining a degree or certificate. Half-time status is defined as at least 6 credits per semester for undergraduate students and at least 3 credits per semester for graduate students.

Schools may grant deferments based on student enrollment information provided by third-party servicers or other schools. This is the only circumstance when a student deferment does not have to be requested in writing. The enrollment information must establish that the borrower is enrolled as a regular student on at least a half-time basis. If a school grants deferment based on this information, the school granting the deferment must notify the borrower of the deferment and offer the option to cancel the deferment and continue repayment of the loan.

Please note that you are not eligible for in-school deferment while serving in a medical internship or residency program, except for a program in dentistry.

If submitting a written request for deferment, you are required to submit a form each term/semester that you qualify for a student deferment. Also, please be sure that your enrollment is not certified before the date classes begin.

New Military Deferment

Notice to Perkins borrowers: Effective July 1, 2006 a new military deferment has been created.

Loans with a first disbursement date on or after July 1, 2001, may be eligible for a deferment during which a borrower is serving on active duty during a war or other military operation or national emergency, or performing qualifying National Guard Duty during a war or other military operation or national emergency.

Called To Active Duty

If you have been called to active duty or reassigned duty stations as a result of a military mobilization, you are entitled to a loan deferment or forbearance.

Your lender(s) must grant you a deferment or forbearance for the following:

In-School Status: If your Federal Family Education (FFEL), Direct Lending (DL), or Perkins loan is in an in-school deferment status, the lender must maintain that status during the period of active service plus the time needed for the borrower to re-enroll in school when released from duty. The total time allowed for this relief is three years, including the time necessary for the borrower to resume enrollment.

Loans in Grace Status: If your loan is in a grace period status when you are ordered to active duty, the lender must keep the loan in this status until the borrower is released from duty. Once the borrower is released from duty, the borrower will receive the remainder of their allotted grace period. The total time allowed for this relief is three years.

Loans in Repayment: If a loan is in a repayment status when you are ordered to active duty, the lender must grant a forbearance beginning on the first day of active duty, not to exceed one year. Forbearance beyond one year will require supporting documentation and a written agreement. Things to remember:

• The request must be made by the borrower, the borrower’s family, or another reliable source.
• The initial request need not be in writing.
• The lender must document the reason for forbearance on the borrower’s account.
• The lender will need to examine the eligibility for a military deferment before processing the forbearance.
• After one year, documentation (such as military ID and a copy of the borrower’s orders) and a written request will be required to extend this relief.

Loans in Default Status: If the guarantor is notified that the defaulted borrower has been called to active duty, they must:

• Cease all pending and future default judgment activities.
• Cease all collection activities for the period of active duty.
• Resume collection activities no later than 30 days after the end of the borrower’s military service.

A borrower may defer repayment if he or she is enrolled in a course of study that is part of a Department of Education approved rehabilitation-training program for disabled individuals.

To receive this deferment, the borrower must provide the school with certification that:

• the borrower is receiving, or scheduled to receive, rehabilitation training from the agency;
• the agency is licensed, approved, certified, or otherwise recognized by a state agency responsible for programs in vocational rehabilitation, drug abuse treatment, mental health services, or alcohol abuse treatment; or by the Department of Veterans Affairs; and
• the agency provides or will provide the borrower rehabilitation services under a written plan that (1) is individualized to meet the borrower’s needs; (2) specifies the date that services will end; (3) is structured in a way that requires substantial commitment from the borrower.

A substantial commitment from the borrower is a commitment of time and effort that would normally prevent a person from holding a full-time job either because of the number of hours that must be devoted to rehabilitation or because of the nature of the rehabilitation.