Deferment of a Student Loan

Deferment of a Student Loan

If a borrower encounters a problem making monthly loan payments, she or he may be able to postpone repayment through deferment or forbearance, which are explained below.

Forbearance/Hardship (Perkins/HPSL)

Forbearance is the temporary postponement of payments. Unlike deferment, interest continues to accrue during forbearance. You can pay your interest monthly or at the end of the forbearance. Interest can't be capitalized on any of the loans held by the University of Michigan.

Perkins loans have only 36 months of forbearance available.

Health Profession and Nursing loans time limitations differ from the Perkins program.

Please contact Student Loan Collections for details, questions or if you have a change in status.

Student Status (Perkins/HPSL/NSL)

Perkins Loan

A borrower may defer repayment of a Perkins Loans, (NDSL, Defense) if he or she is enrolled at least half-time, (in-school deferment), the student must be enrolled as a regular student in an eligible institution of higher education or a comparable institution outside the United States approved by the Department of Education for deferment purposes. Interest will not accrue during the deferment. It is not a requirement that the school participate in the Federal Perkins Loan Program. If a borrower is attending a school that ceases to qualify as an institution of higher education, the borrower's deferment ends on the date the school ceases to qualify. A regular student is one who is enrolled for the purpose of obtaining a degree or certificate.

Nursing Loan

A borrower may defer repayment but must be enrolled at least half-time as a student in an accredited school of nursing in a course of study leadng to a baccalaureate or graduate degree in nursing.

Health Profession/Primary Care Loans/Loans to Disadvantaged Students (LDS)

A borrower may defer repayment for full-time enrollment in a course of study at a school of medicine, osteopathy, dentistry, pharmacy, podiatry, optometry, or veterinary medicine leading to a diploma, baccalaureate or equivalent degree. For LDS accounts, the school you are now attending must participate in the LDS program. Borrowers with Primary Care Loans should contact Student Loan Collections before filing for student status deferment.

Please contact Student Loan Collections for details, questions or if you have a change in status.

Economic Hardship (Perkins Loans)

Federal Perkins loans are eligible for a total of 36 months of economic hardship. This deferment can be granted in periods up to 12 months at a time. To qualify a borrower must provide documentation showing they qualify within any of the following 3 categories:

  1. Have been granted economic hardship by another federal student loan program, ie: Stafford, GSL, SLS, PLUS Loan or other Federal Perkins loan, for the same time period they are requesting.
  2. Receiving payment under a federal or state public assistance program such as Aid to Families with Dependent Children, Supplemental Security Income, Food Stamps, W.I.C. or State General Public Assistance.
  3. The borrower must be employed full time (30 hours or more per week) earning a total monthly gross income that doesn't exceed the greater of an individual earning minimum wage or an amount equal to 150% of the HHS poverty guideline. Please see the deferment request form for further details on this category.

Please contact Student Loan Collections for details, questions or if you have a change in status.

Unemployment (Perkins Loans)

Perkins Loans are eligible for unemployment deferment. There are a total of 36 months available. A borrower must be seeking and unable to find full-time employment to qualify.

Please contact Student Loan Collections for details, questions or if you have a change in status.

Graduate/Fellowship (Perkins Loans)

A borrower 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 may defer payments. A borrower is engaged in graduate or postgraduate fellowship-supported study such as a Fulbright grant outside the United States.

Please contact Student Loan Collections for details, questions or if you have a change in status.

Rehabilitation Training (Perkins Loans)

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 must be licensed, approved, certified, or otherwise recognized by a state agency responsible for programs in vocational rehabilitation, drug abuse treatment, mental health services, alcohol abuse treatment; or by the Department of Veteran Affairs. 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 requires1 substantial commitment from the borrower.

Notes

  1. A substantial commitment from the borrower is a commitment of time and effort that would normally prevent the borrower 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.

Please contact Student Loan Collections for details, questions or if you have a change in status.

Military Service Deferment (Perkins Loans)

Military Service Deferment

A borrower who is serving on active duty in the U.S. armed forces or performing qualifying National Guard duty may defer repayment (principal or interest) on a Perkins Loan if the duty is in connection with a war, military operation, or national emergency.

13-Month Post-Active Duty Deferment

Effective October 1, 2007, borrowers who are members of National Guard or Armed Forces Reserve, and members of the armed forces who are in retired status, are eligible for a 13-month period of deferment on repayment of their Perkins loans following the completion of their active duty military service if they were enrolled in a postsecondary school at the time of, or within six months prior to, their activation. Reserve or retired members of the Armed Forces may qualify for both the post-active duty deferment and for the military service deferment, and may receive both deferments if eligible.  If a student receives both deferments, the overlapping periods of deferment will run concurrently.

Members of the National Guard may qualify for this deferment for Title 32 full-time National Guard duty under which a governor is authorized, with the approval of the President or the U.S. Secretary of Defense, to order a member to state active duty and the activities of the National Guard are paid for by federal funds; or for state active duty under which a governor activates National Guard personnel based on state statute or policy, and the activities of the National Guard are paid for by state funds. Active duty does not include a borrower who is serving full-time in a permanent position with the National Guard, unless the borrower is reassigned as part of a call-up to active duty service.

Please contact Student Loan Collections for details, questions or if you have a change in status.

Internship/Residency (Perkins Loans)

Not available on Perkins loans made after 6/30/93 except for borrowers in a Dentistry Residency.

For loans made prior to 6/30/93 contact the Student Loan Collections Office.

Please contact Student Loan Collections for details, questions or if you have a change in status.

Health Profession/Primary Care Loans/Loans to Disadvantaged Students
  1. Full time enrollment in a course of study at a school of medicine, osteopathy, dentistry, pharmacy, podiatry, optometry, or veterinary medicine leading to a diploma, baccalaureate or equivalent degree. For LDS accounts, the school a borrower is currently attending must participate in the LDS program. Borrowers with Primary Care Loans should contact Student Loan Collections before filing for student status deferment.
  2. Full time pursuit of advanced professional training. The training must be within the discipline for which the borrower received their HPSL/PCL loan. The original grace period must expire before benefits can be granted. The borrower may self-certify the certification portion of the deferment form. They must submit a form on an annual basis.
  3. Participating in a Fellowship Training Program or other Related Education Activity. They may begin either activity prior to the completion of advanced professional training (APT), but not later than 12 months after completion of the APT, internship, residency, or undergraduate work. Fellowship must be a full time activity in research, research training or health care policy. "Related Education Activities" must be part of a joint degree program or activity that is required for licensure, registration, or certification or a full time educational program in public health, health administration, or health care discipline. These activities must be related to the discipline for which the borrower received your HPSL loan. Maximum benefit is 2 years.
  4. Active duty in a uniformed service including the National Oceanic & Atmospheric Corps and the Public Heath Service. Their original grace period must expire before benefits can be granted. Maximum benefit is three years.
  5. A volunteer in the Peace Corps. The borrower's original grace period must expire before benefits can be granted. Maximum benefit is 3 years.
  6. Interruption of Studies to pursue a directly related Health Profession education activity. The activity must be related to the discipline for which they received a HPSL loan. The borrower must intend to return to the lending institution full time to complete their studies.

Please contact Student Loan Collections for details, questions or if you have a change in status.

Nurse Faculty Loans

Postponement of Installment Payments Prior to Cancellation

When a borrower is employed full-time as a faculty* at a school of nursing and will request partial cancellation of the loan at the end of each complete year of employment, the borrower may obtain a postponement of installment payments on the loan. The borrower must submit the Request for Postponement and Partial Cancellation Form for each period of cancellation. This form is intended to notify the lending school that repayment is not expected from borrower. The form requires the borrower to:
- complete Part I;
- obtain certification by the employing school of nursing in Part II; and
- forward the original to the lending school.
U-M Student Loan Collections will notify the borrower of the approval of the Request for Postponement and retain the form in the borrower's file. The borrower must notify Student Loan Collections of termination of full-time employment as faculty prior to completion of a year within 30 days after the last day of such employment; the loan will be placed back into repayment with installment payment(s) payable according to the borrower's repayment schedule.

Partial Loan Cancellation

Borrowers must request PARTIAL loan cancellation each year while employed as full-time nurse faculty at a school of nursing over a consecutive 4-year period. To receive loan cancellation, the Borrower must submit the Request for Postponement and Partial Cancellation of Loan Form to Student Loan Collections at the end of each complete year of full-time employment as faculty at a school of nursing. This form requires the borrower to:
- complete Part I;
- obtain certification by the employing school of nursing in Part II; and
- forward the form to the lending school for partial cancellation of loan. You will receive a confirmation letter when your request has been approved and processed, or denied. If the borrower takes a break from full-time employment as nurse faculty during the year, the borrower is not eligible for loan cancellation and must begin repayment of the NFLP loan immediately.

*The US Department of Health and Human Services, Health Resources and Services Administration (HRSA) defines “Nurse Faculty” as an academic faculty role appointment at the Instructor, Assistant, Associate or Professor level, on either tenure or non-tenure track.  Under NFLP, an adjunct faculty role, part-time clinical instructor role or non-academic role does not qualify.

Deferment of Loan Repayment

Deferment options under the NFLP are limited.

  1. NFLP borrowers who are ordered to active duty as a member of a uniformed service of the United States (Army, Navy, Marine Corps, Air Force, Coast Guard, the National Oceanic and Atmospheric Administration Corps, Peace Corps, or the U.S. Public Health Service Commissioned Corps) are eligible for deferment for up to 3 years. A borrower who voluntarily joins a uniformed service is not eligible for deferment, nor is a borrower who is employed by one of the uniformed services in a civilian capacity.
  2. NFLP borrowers that graduate and are employed, and decide to return to a graduate nursing education program to pursue a doctoral degree to further their preparation as nurse faculty may request deferment of payment for up to 3 years.
  3. NFLP borrowers that graduate and participate in post-doctoral programs may request deferment of payment for up to 3 years.
  4. Forbearance may be available when extraordinary circumstance affect the borrower's ability to make their scheduled loan payment. Please contact Student Loan Collections for further information.

Please contact Student Loan Collections for details, questions or if you have a change in status.

Nursing Loan Deferments
  1. Enrolled as at least a half-time student in an accredited school of nursing in a course of study leading to a baccalaureate or graduate degree in nursing.
  2. Enrolled as at least a half-time student (full-time for NSL's prior to 11/4/88) in a course of study leading to an advanced degree in nursing or otherwise pursuing advanced professional training that will advance their knowledge of and strengthen their skills in the provision of nursing services. In addition to advanced degree programs, certificate programs are also eligible.
  3. Serving in a uniformed service including the National Oceanic & Atmospheric Corps and the Public Heath Service. There is a limit of three years combined eligibility for uniformed service and Peace Corps deferment.
  4. A volunteer in the Peace Corps. There is a limit of three years combined eligibility for uniformed service and Peace Corps deferment.

Please contact Student Loan Collections for details, questions or if you have a change in status.