This is the second Friday where we look at the pros and cons of deferments and forbearances. Today we will look at the Unemployment Deferment.
What it is: A deferment designed if you are working less than 30 hours and collecting Unemployment Benefits or registered with an employment agency
Eligibility Requirements: Interestingly you don’t have to be unemployed to qualify for this deferment and being unemployed is not enough. As indicated above, one must be working less than 30 hours a week, actively seeking work, and either certified with an employment agency or receiving Unemployment benefits.
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 use up to 6 months at a time for this deferment.
Why it may not be the best idea: Similar to the Economic Hardship Deferment, in most cases you will qualify for a $0.00 IDR in these situations, which is more advantageous than the deferment. Remember even with no income, you can still qualify for Income Driven plans!
Once again, 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/deferments can be done verbally, some online, while some require a form. Depending on the reason you qualify for this deferment dictates what way you apply for this form. To discuss your options as always contact your servicer!