For the next couple of Friday’s we will be looking at forbearances and deferments and evaluating if it is a good option for you. Today we are looking at the Economic Hardship Deferment.
What it is: A Deferment designed if you work full time but don’t make enough money or are on state and/or federal assistance
Eligibility Requirements: You have to work at least 30 hours and make with 150% of the poverty line based on your family size or be receiving state and federal assistance such as food stamps or cash assistance.
How long is this Deferment for: For post 7/1/93 loans (many rules were different before then) you get 3 years of deferment. You can get up to a year at a time if based on income and if based on assistance, it will run through when your assistance ends (up to a year).
Why it may not be the best idea: Traditionally if you are making the amount of money needed to qualify for this deferment, you will also qualify for an Income Driven Repayment plan. Often times this plan can be at $0.00. If this is the case the IDR would be more beneficial so explore all your options first!
For any forbearance or deferment it is best to visit your servicer’s website or contact them by phone or email for details. Some forbearances can be done verbally, some online, while some require a form. Traditionally this one is done by using a form you can print off the servicer’s website or have sent to you, but it is best to talk to your servicer for all your options.