Your loan holder understands that you may experience financial difficulty and offers options that may temporarily reduce or suspend your monthly Consolidation Loan payments. If you are having trouble making payments, contact your loan holder immediately to request assistance, such as a deferment or forbearance.
Deferment: A period of time during which your loan holder temporarily suspends your regular payments
Forbearance: A period of time during which your loan holder temporarily reduces or suspends your regular payments
Interest during deferments and forbearance
- You are responsible for paying the interest that accrues on the unsubsidized portion of your Consolidation Loans during deferment and forbearance periods.
- You may pay the interest as it accrues or allow it to capitalize. Capitalized interest is added to the principal balance and can result in a higher monthly payment.
- Organize all your loan records. This way, if you need to contact your loan holder, you'll have the facts about your loan handy.
- If you request a deferment or forbearance, continue making your payments until you receive written notification from your loan holder that the deferment or forbearance is approved.