Deferment is the temporary postponement of your monthly student loan payment obligation. Interest will continue to accrue on your Unsubsidized and Grad Plus loans but interest will not accrue on subsidized loans.
Forbearance is the temporary postponement or reduction of your monthly student loan payment obligation. During forbearance interest accrues on the entire balance of your student loans, including your Subsidized loans.
Many residents are now taking advantage of one of the Income Driven Repayment options offered by the Federal Student Loan program(s). However, there may be situations where postponing repayment is required. Deferment or Forbearance are options to assist you in avoiding Delinquency and Default. You will need to contact your servicer(s) to obtain the required documents to postpone your monthly payments. Often these forms are available on their web site once you log in to your account.
If you are unsure of whom your loans servicer(s) is visit the National Student Loan Data System (NSLDS) at www.nslds.ed.gov. Keep in mind NSLDS will only show you the servicers information on your Federal Student Loans. Visit your Servicer(s) to obtain the required forms. If you have private loans check your credit report for free at www.annualcreditreport.com.
Types of deferment and forbearance available to eligible borrowers:
Borrowers must be enrolled at least half-time in a degree seeking program.
Graduate Fellowship Deferment
Borrowers must be in a qualifying program; check with your program administrator. Typically medical residents will not qualify for this type of deferment.
Borrowers must be actively seeking employment; contact your servicer(s) to see if you are eligible.
Mandatory Residency Forbearance
This is available to medical residents during the advanced training years. Mandatory Residency Forbearance requires that your lender allow you to postpone payment of your loans during your additional years of training. While this alleviates your monthly payment obligation, interest is still accruing on the entire balance of your student loans and will be capitalized at the end of each forbearance period.
Deferment and Forbearance Requests
Recently, Student Financial Services received information from several loan servicers that indicates that forbearance and deferment requests should be processed by the person overseeing the internship, fellowship or residency. This means that student financial services can no longer process or certify deferment/forbearance requests for residents. Please contact your residency program coordinator, direct supervisor or the staff of the Graduate Medical Education office for completion of these forms.
Separation of duties is actually a very basic part of the student loan program. Separating duties/processes ensures that the same personnel do not process the loan and also defer it.