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College Students and Recent Grads

Guide to Filing the FAFSA

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

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Over the past decade, college tuition rates rose an average of 5% per year. The average bachelor’s graduate in 2015 had over $35,000 in student loan debt. To graduate without burdensome debts, students must maximize their aid options. This means understanding the Free Application for Federal Student Aid (FAFSA), and using their knowledge to maximize student aid.

Starting with the 2017-2018 FAFSA, maximizing federal aid is easier than ever. The U.S. Department of Education now allows access to the FAFSA three months earlier (October rather than January). Applicants will also use an earlier year for income and tax information. This means it’s easy to incorporate FAFSA into the college application timeline.

What is the FAFSA?

The FAFSA is the Free Application for Federal Student Aid. It’s a dense form that students must complete to receive federal student aid.

The form ensures that federal student aid goes to students with the greatest need. However, this does not mean that only low-income families should fill out the form. Filling out the FAFSA is the only way to receive access to low-cost federal student loans. The FAFSA also gives families access to some scholarships, grants, and work-study programs. Some schools require a completed FAFSA for a student to apply for merit-based aid.

What do I need to fill out the FAFSA?

Filling out the FAFSA may seem daunting, but proper preparation will help families complete the application with minimal stress.

Here’s a checklist of items you’ll need before filling out the FAFSA.

All Students

  • Social Security number
  • Alien registration number (if you are not a U.S. citizen)
  • Student’s federal income tax returns from the appropriate year
  • Student’s prior year W-2 or other earning statements from the appropriate year
  • Student’s records of untaxed income from the appropriate year
  • Student’s bank statements (checking, savings)
  • Student’s non-retirement investment account statements (after tax brokerage, 529 accounts, Coverdell ESA accounts, CDs, money market accounts)
  • Student’s record of non-taxed income (including income gifts that come from 529 plans owned by grandparents, income gifts to pay tuition, etc.)
  • Student’s records for investment real estate
  • An FSA ID to sign electronically

Dependent Students Only

  • Parent’s federal income tax returns from the appropriate year
  • Parent’s W-2 or other earning statements from the appropriate year
  • Parent’s records of untaxed income from the appropriate year
  • Parent’s banking and checking account statements
  • Parent’s non-retirement investment account statements (after tax brokerage, 529 accounts, Coverdell ESA accounts, CDs, money market accounts)
  • Parent’s records for investment real estate (not personal home)

Most students will be considered dependents. This is true even if a student is self-supporting for a period of time prior to starting college.

To be classified as independent, a student must meet one of these qualifications:

  • Student turns 24 prior to January 1 of FAFSA start year (see chart above)
  • Student is starting postgraduate studies
  • Student is on active military duty (not for training purposes or for state service only)
  • Student is a military veteran
  • Student supports dependent children
  • Student is a legally emancipated minor
  • Parents died after age 13, foster child after age 13, or dependent or ward of the state after age 13
  • Student is homeless or self-supporting and at risk of homelessness after July 1 in the year prior to start year (see chart above)

One of the most important ways to ease the stress is to gather documents from the appropriate time. Use the chart below as a reference guide to understand the appropriate documents.

School attendance windowFAFSA formFAFSA availabilityIncome and tax yearAssets and liabilitiesBorn before this date for independent student statusHomeless or self-supporting and at risk of homelessness after this date for independent status
July 1, 2016-June 30, 20172016-2017January 1, 2016-June 30, 20172015As of filing FAFSAJanuary 1, 1993July 1, 2015
July 1, 2017-June 30, 20182017-2018October 1, 2016-June 30, 20182015As of filing FAFSAJanuary 1, 1994July 1, 2016
July 1, 2018-June 30, 20192018-2019October 1, 2017-June 30, 20192016As of filing FAFSAJanuary 1, 1995July 1, 2017
July 1, 2019-June 30, 20202019-2020October 1, 2018-June 30, 20202017As of filing FAFSAJanuary 1, 1996July 1, 2018

 

When are the FAFSA deadlines?

College students need to fill out the FAFSA every year that they want to receive federal financial aid. A traditional student who spends four years in school can expect to fill out the FAFSA four times through their college career.

Starting with the 2017-2018 FAFSA, the U.S. Department of Education extended the FAFSA deadlines. Previously, the U.S. Department of Education released the FAFSA on the January 1 prior to the attendance window. Applicants could complete the form from January 1 through the end of the attendance window.

 

Now, the U.S. Department of Education releases the FAFSA on October 1 prior to the attendance window. You may complete the FAFSA from the date it is released until the end of the attendance window. You can retroactively receive grants and loans for the school year provided that you complete the FAFSA by the end of the attendance window.

Deadlines for state and institutional aid

State and institutional aid organizations are not as lenient as the U.S. Department of Education. Most states require aid applicants to complete their FAFSA as soon after October 1 as possible. You can check your state-specific deadline on the FAFSA website.

Most states have just one FAFSA deadline, even if you plan to attend school on a delayed schedule. Often states give out aid on a first come, first served basis. Do not delay completing the FAFSA. You can work out changes based on your attendance after you’ve completed the FAFSA.

In general, you want to file the FAFSA as soon as you can to maximize institutional aid. Many universities grant institution-specific aid shortly after accepting students. Submit your FAFSA to all potential schools soon after you apply. Even if a school hasn’t accepted you yet, you should allow them to see your FAFSA responses.

Filling out the FAFSA alone may not be enough to get aid from your state or school. Many states require that you fill out additional forms to receive state-based aid. The most common form is the College Scholarship Service (CSS) profile. The CSS profile considers more data, and it offers students and their families the opportunity to flesh out their financial situation.

The CSS profile and other financial aid applications DO NOT replace the FAFSA. To get any federal student aid, you must fill out the FAFSA. You may also need to fill out additional forms. The Edvisors Network maintains a comprehensive list of state-based scholarships and grants. Students can research the forms that their state requires.

Students who are seeking college-based aid may have to complete institutional applications. These applications may be in addition to the FAFSA or in lieu of it. If aid details aren’t clear from the school’s website, contact the financial aid department to learn more. Many students find that their best chance at institutional aid comes right after applying to the school.

What happens after I fill out the FAFSA?

1. You’ll receive your Student Aid Report via e-mail

Three to five days after you complete the FAFSA, you will receive a Student Aid Report via email. This report is what schools will use to determine your eligibility for federal (and sometimes other) student aid.

 Understanding your Expected Family Contribution’ (EFC)

The most important number on the FAFSA is your Expected Family Contribution (EFC). Your family’s EFC is the amount parents and students are expected to allocate toward educational expenses. This amount can vary from zero dollars to more than the expected cost of college. This number is in the upper right-hand corner of the Student Aid Report.

In general, the lower your EFC, the more federal aid you will receive. Your specific eligibility for federal aid depends on your school’s cost of attendance.

The Student Aid Report also includes a Data Release Number (DRN). You will need this four-digit code to allow your school to change certain information on your FAFSA.

In addition to these two numbers, you will see your responses to questions on the FAFSA. If you find a mistake, you will need to correct it on FAFSA.gov. You can use your FSA ID to log in and submit changes. If your situation changes (such as the number of people in your parents’ household or your dependency status), you will need to update your FAFSA because it will change your EFC.

2. Schools will submit awards packages to you

The U.S. Department of Education will send your Student Aid Report to any schools you have listed on your FAFSA. If you apply for another school after completing the FAFSA, you should log in to FAFSA.gov to submit your Student Aid Report to that school.

Once you’ve been accepted to the school, the school will use the EFC and their cost of attendance to determine your eligibility for federal aid. The school will send you a report that includes your eligibility for federal grants, subsidized and unsubsidized loans, and work-study programs. They may also send you details about other financial awards that you’ve received from the state or the institution.

You may need to contact the financial aid office at a school to see if you’re eligible for any scholarships or grants that they didn’t list. Be proactive in meeting other financial aid deadlines defined by your school’s financial aid office. Completing the CSS profile or institutional applications may allow you to earn more scholarships or grants or better loan rates. Check with schools where you’ve been accepted and your state’s website to learn more.

You can receive awards packages from multiple schools, even if you haven’t enrolled. Compare the awards packages to find the most cost-effective education. The federal aid will remain the same in every package, but the state and institutional aid can have a huge effect on your out-of-pocket costs.

3. You have to accept or decline the financial aid offered to you

Once you choose a school, you will need to decide whether or not to accept the various forms of aid. Most people will accept grants and scholarships since those do not need to be paid off.

You will need to decide if accepting federal work-study or loans is best in your circumstances. You can work closely with a financial aid officer from your school to understand the pros and cons behind these options.

Once you make a decision, you’ll have the option to accept aid (including loans) through an online platform offered by your school.

what-happens-after-i-fill-out-the-fafsa

How is my federal aid package determined?

Federal aid is awarded based on expected family contribution (and to a lesser extent the cost of attendance at your chosen university). A lower expected family contribution means you’ll get more aid, including subsidized loans and possibly a Pell Grant for low-income students.

The expected family contribution accounts for four variables:

  • Student’s income (and spousal income for independent students)
  • Student’s non-retirement assets (and spousal income for independent students)
  • Parent’s income (for dependent students)
  • Parent’s non-retirement assets (for dependent students)

Parents and students can shelter a limited amount of their income and assets from the EFC. The sheltering limits change each year, and they are published within the FAFSA application.

Students are expected to contribute 50% of their income after sheltering. They are expected to contribute 20% of nonsheltered assets to their educational expenses. Students cannot shelter as much income or net worth as parents.

Parents are expected to contribute 22% to 47% of income after sheltering. They are expected to contribute 12% of nonsheltered assets.

Using the EFC and an expected cost of attendance, the U.S. Department of Education appropriates funds. The FAFSA4caster will help you determine your current EFC and an expected aid package based on current costs of attendance. This is a useful tool for students who are more than one year out from starting college.

Full-time students with an EFC less than $5,200 can expect to receive a Pell Grant worth between $600 and $5,185.

Students who demonstrate financial need (those with a cost of attendance greater than their expected family contribution) will be eligible for either direct subsidized or direct unsubsidized loans. Both loans for undergraduate students have an interest rate of 3.76%. Graduate students will pay 5.31% on their direct unsubsidized loans.
The federal government places limits on direct borrowing. The limits are in the table below. If you need to borrow more money, you will have to look to federal PLUS Loans (higher interest rates), private loans, or covering educational expenses through other means.

YearDependent Student LimitIndependent Student Limit
First Year Undergraduate$5,500 (up to $3,500 subsidized)$9,500 (up to $3,500 subsidized)
Second Year Undergraduate$6,500 (up to $4,500 subsidized)$10,500 (up to $4,500 subsidized)
Third Year + Undergraduate$7,500 (up to $5,500 subsidized)$12,500 (up to $5,500 subsidized)
Undergraduate Student Total Limits$31,000 (up to $23,000 subsidized)$57,500 (up to $23,000 Subsidized)
Graduate StudentsN/A$20,500 (unsubsidized only)
Graduate Student Total LimitsN/A$138,500 (up to $65,500 in subsidized loans). Aggregate amount includes totals from undergraduate studies.

How can I maximize my federal aid?

You must use accurate information when you complete the FAFSA. However, careful planning and understanding the FAFSA can help you maximize your aid. Keep these steps in mind as you apply for aid.

Avoid common FAFSA errors

It’s easy to make errors when you’re filling out a 100+ question application, and the wording on the FAFSA can be unclear. These are a few mistakes to avoid.

Easy mistakes that can throw off your FAFSA submission

Incomplete e-signature. The FAFSA can also trip you up on seemingly-easy steps, like providing an e-signature. If you don’t provide the e-signature correctly, or think you hit ‘submit’ but didn’t, you may waste valuable time waiting for an email that won’t come until you sign the form properly.

Missing mistakes on your Student Aid Report. About two weeks after you submit the form, you should receive a Student Aid Report which gives you basic information about your eligibility for federal student aid along with your Expected Family Contribution – what your family is expected to pay. The SAR also includes a four-digit Data Release Number (DRN), which you’ll need to allow your school to change certain information on your FAFSA.The SAR also lists your responses to the questions on your FAFSA, so be sure to review it and correct any mistakes.

Income verification notifications. After you receive your SAR, check to see if you’ve been flagged for ‘income verification’ as about 1/3 of students are required to verify their parent’s income with additional proof to complete the FAFSA process. The government usually follows up on students who are more likely to qualify for the federal Pell grant or other grant-based aid, Page says. If flagged for income verification, you’ll have to submit verification to each school you apply to, and the schools may have different paperwork and processes.

Missing deadlines in e-mail. When you create and submit the FAFSA, you give the Education Department your email address. The Education Department will email you, so you need to check the inbox of the email address you provided for correspondence. Create your FAFSA account using an email account you check regularly. Turn on your email notifications on your devices so you won’t miss any emails reminding you to submit your FAFSA form or letting you know if something went wrong somewhere in the process.

If you’re not sure what a question means, use the guide Completing the FAFSA to understand the definition. The wording of questions leads a lot of people to overestimate their EFC.

How can I use FAFSA to plan for college costs?

The FAFSA is not a college-cost planning tool, but you can use other tools to plan for upcoming college costs. College Navigator offers free information on current college costs. Using it with estimated aid from the FAFSA4caster will give high school students a good idea of their aid options. You could also consider using a paid tool like EFC Plus for an easier college-planning tool.

Parents and students looking to keep student loan debt low will benefit from using the Family Budget Analyzer, which can help you find places to cut expenses. A college cost projector will help you know the costs that your family needs to cover. Sallie Mae also offers a long-range planning calculator that can help you estimate your total indebtedness upon college graduation.

Understanding the FAFSA is one small part of planning for college costs. It will pay for you to understand it, but federal aid is just one component of the college-planning picture. Most students will need to devote time to finding a cost-effective education and applying for grants and scholarships to supplement federal aid.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Hannah Rounds
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Hannah Rounds is a writer at MagnifyMoney. You can email Hannah here

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College Students and Recent Grads

8 Things to Know Before Applying for Student Loans

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

8 Things to Know Before Applying for Student Loans
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If you’ve never borrowed money before, applying for student loans can be confusing. You might have to choose between federal and private student loans, for example, or a fixed or variable interest rate. With all your options, it’s crucial to learn how to apply for student loans before entering any kind of contract.

By understanding how to apply for college loans, you’ll be empowered to make smart decisions about paying for your education. This beginner’s guide will go over what you need to know about how and when to apply for student loans.

What to know before applying for student loans

1. Your loans might be federal or private

As a college student or parent of a college student, you have two options for student loans: federal or private. Federal loans come from the Department of Education and are available for any student attending an eligible school.

You can access federal loans, such as subsidized and unsubsidized loans, by submitting the Free Application for Federal Student Aid, or FAFSA. In most cases, it’s smart to max out your eligibility for federal loans before turning to a private lender.

This is because the federal government offers relatively low interest rates and a variety of flexible repayment plans. But since federal student loans come with borrowing limits, you might need more help to pay for school.

In this case, you could turn to private student loans, which come from a bank, credit union or online lender. Unlike federal student loans, you’ll need to meet underwriting requirements for credit and income to get a private loan.

Most undergraduates apply with a cosigner, such as a parent. Although private student loans can help fill the funding gap, be careful about borrowing a loan with a high interest rate. Private lenders typically aren’t so flexible if you run into financial hardship.

2. You may pay interest right away

Whatever type of student loan you borrow, you’ll have to pay back the principal amount and interest. As of July 1, 2018, federal student loans have an APR of 5.05% for undergraduates and 6.6% for graduate students.

Private loan interest rates vary depending on which lender you choose and how strong your credit is. Lenders in MagnifyMoney’s private student loans marketplace offer fixed APRs starting at 5.25% and variable APRs from 4.07%.

Because of interest, you’ll end up paying back a good deal more than you borrowed, especially if repayment spans 10 or more years. Plus, interest typically starts accruing from the date your loan is disbursed.

For example, let’s say you borrowed a $30,000 loan at a 5.05% rate. Over 10 years, you’ll end up paying $8,272 in interest. If you can pay off your loan in five years, you could save $4,263 on interest.

Note that subsidized federal loans, which are available to students with financial need, work slightly differently. The government covers interest while you’re in school on subsidized loans, so you’ll only have to start paying interest once your repayment period begins after graduation.

3. You’ll likely have a grace period

As a college student, you probably won’t have a lot of money to pay back your loans. Luckily, federal loans, as well as most private loans, don’t require immediate repayment.

Instead, you can postpone payments while you’re still in school and for six months after you graduate. This deferment is called a grace period, and it lets you focus on your education before having to worry about student loan payments.

But since interest might be accruing, you could choose to make small payments while you’re still in school. If you can swing small payments, perhaps with income from a part-time job, you won’t be facing such a big balance after graduation.

Note that some private lenders require you to make in-school payments, sending your first bill just a month or two after your loan was disbursed. Make sure you understand all the terms and conditions of a private loan before borrowing so you don’t accidentally fall behind on repayment.

4. You have various repayment options

Learning how to apply for student loans is a crucial first step, but you also need to know how to pay them back. Your options will look different depending on whether you’re borrowing federal or private student loans.

Federal student loans come with a variety of repayment plans. The standard plan spans 10 years, but you can opt for a different plan to adjust your bills, such as income-driven repayment or extended repayment.

Income-driven plans, which span 20 or 25 years, can lower your payments and end in loan forgiveness. But if you stretch repayment over two decades, you’ll end up paying a lot more in interest.

If you owe $35,000 at a 5.05% rate, for example, you’d pay $9,650 in interest over 10 years. But if you stretch repayment out over 20 years, you could pay $20,669 in interest. With a 25-year loan, you’d pay $26,688 in interest. So even though your monthly payments feel more affordable on an income-driven plan, you’ll end up paying more on your loan overall.

Private student loans work a bit differently. When you apply, you’ll choose your loan terms, typically somewhere between five and 15 years. After this point, you might not be able to change your terms.

Some lenders will be flexible if you run into financial hardship, and you might be able to choose new terms through refinancing. But you won’t have access to the many plans available for federal student loans, so make sure to choose your repayment plan carefully before applying for student loans from a private lender.

And no matter the repayment plan you select, you can always prepay your federal or private student loans without penalty.

5. Your private loan could have a fixed or variable interest rate

Federal student loans come with fixed interest rates that remain the same over the life of your loan. But private lenders set their own rates and assign the best ones to creditworthy borrowers. Plus, they typically let you choose between a fixed rate and a variable rate on your student loan.

A fixed rate stays constant, while a variable one could rise over time. If you’re spreading out repayment over a decade or more, a variable rate could cost you. But if you’re planning to pay back your loan quickly, electing a variable rate could save you money on interest.

6. You might be able to pause payments in certain circumstances

Even if you have every intention to pay back your student loan on time, you can’t help it if an emergency pops up. Maybe you lose your job and don’t have an income for a few months. Or perhaps you decide to return to school and want to pause payments again.

If you have federal loans, you can postpone payments temporarily through forbearance or deferment. Both programs let you pause payments, but you won’t have to pay interest on subsidized loans during a period of deferment — only on unsubsidized loans.

Forbearance is typically used during times of financial hardship, while deferment is more often used when you return to school, go on active military service, join the Peace Corps or experience unemployment.

Some private lenders also offer forbearance and deferment, but this varies by lender. Plus, there’s not much of a distinction between these two programs when it comes to private loans, since private loans will always keep accruing interest.

If you’re worried about your ability to keep up with payments, consider applying for student loans with a lender who offers this benefit.

7. You could qualify for loan forgiveness or repayment assistance

Depending on where you live and work, you could get some of your student loan debt wiped away through forgiveness or repayment assistance. Federal programs, such as Public Service Loan Forgiveness and teacher loan forgiveness offer partial or total forgiveness after a certain number of years of service in a qualifying organization or profession.

Many states also offer student loan repayment assistance to certain professionals who work in a shortage area or with a high-need population. Several of these programs offer assistance to pay off both federal and private student loans.

A growing number of companies are offering a student loan-matching benefit to their employees to help them cut through debt. If you’re looking to get your debt discharged ASAP, explore your options for loan forgiveness and repayment assistance.

8. You can restructure your debt through student loan refinancing

With Americans owing more in student loans than ever before, many are looking for relief. For some, student loan refinancing can help.

When you refinance, you give one or more of your old loans (federal or private) to a lender. That lender then issues you a new loan in their place, hopefully with better terms.

Creditworthy applicants can snag lower rates on their debt as well as choose new repayment terms, usually between five and 20 years. Not only can refinancing save you money on interest, but it also lets you adjust monthly payments in a way that works with your budget.

Along with these benefits, though, keep in mind one potential downside: Refinancing federal loans turns them private. As a result, you lose access to federal protections like income-driven plans and forbearance.

But if you’re confident you can pay back your loan on time, applying for student loan refinancing could be a strategic way to manage your debt.

Learn how to apply for student loans to pay for college

Most students should borrow federal student loans before turning to a private lender. Submit the FAFSA and you’ll have access to the world of federal financial aid.

But if you need more funding, learn how to apply for student loans with a private lender. You’ll need to fill out an application and submit your (or your parent’s) documents, such as pay stubs and tax returns.

It’s a good idea to shop around with lenders before choosing one. That way, you can find a private loan with the best rate to finance your education.

The information in this article is accurate as of the date of publishing.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Rebecca Safier
Rebecca Safier |

Rebecca Safier is a writer at MagnifyMoney. You can email Rebecca here

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College Students and Recent Grads

7 Private Student Loan Options That Let You Pause Payments

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

7 Private Student Loan Options That Let You Pause Payments
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With student loan debt in the U.S. surpassing $1.56 trillion, it’s not surprising that more than 1 million borrowers default every year. If you’re struggling with payments, you might be wondering about student loans with deferred payments.

Fortunately, you can pause payments on federal student loans through forbearance or deferment. Deferred private student loans are also a possibility, though policies vary by lender.

Here’s what you need to know about postponing payments on your student loans, followed by seven lenders that offer private student loan deferment and forbearance.

Forbearance vs. deferment: What’s the difference?

Both forbearance and deferment allow you to postpone payments on your student loans without going into default. But when it comes to federal student loans, these two programs have some key differences.

Deferment is available for students who go back to school, lose their job or are on active military duty. Forbearance is designed primarily for borrowers who have encountered financial hardship.

If you have subsidized federal student loans, they won’t accrue interest during deferment. But you will be responsible for interest that accrues on your loans, subsidized or not, during forbearance. So deferment is a preferable option if you have subsidized loans and can qualify.

While forbearance and deferment are different programs with federal loans, the distinction can get fuzzy with private loans. Some private lenders use the terms interchangeably since they effectively work the same way.

The downside of student loans with deferred payments

Pausing payments on your student loans could be important while you look for a job or work on your next degree. But unless you have subsidized loans in deferment, interest will keep rising.

Let’s say you owe $30,000 in student loans with a 5% interest rate on a 10-year term. After three months of student loans with deferred payments, you’ll accrue an additional $373 in interest. After a year of paused payments, your balance would increase by $1,500.

Taking loans out of deferment or forbearance is typically considered a capitalization event, meaning the interest that has accrued will be added to the principal. In effect, you’ll end up paying interest on top of interest.

That’s why deferment and forbearance should only typically be used as a last resort. If you can continue to make payments, or at least pay off the interest each month, you won’t run the risk of a ballooning student loan balance.

Another option is adjusting payments on your federal student loans through an income-driven repayment plan, which adjusts your bill based on how much money you make. Unfortunately, you probably don’t have this option with private student loans.

So if you can’t afford to pay, private student loan deferment could be the way to go.

7 lenders that offer private student loan deferment and forbearance

Terms and conditions vary by lender, and only some offer student loans with deferred payments. Here are seven lenders that offer deferment or forbearance on their private student loans or refinanced student loans.

1. LendKey

If you refinance your student loans through LendKey, you can apply for deferment for up to 18 months for any reason. LendKey approves these requests on a case-by-case basis, so make sure to reach out to your loan servicer if you’re having trouble making payments. However, LendKey doesn’t offer in-school deferment with its private student loans.

2. Sallie Mae

If you have a Sallie Mae Smart Option student loan, you could request up to 60 months of deferment for returning to school or taking part in an internship, fellowship, residency or similar program. Sallie Mae suggests it can postpone payments through forbearance for those who run into financial hardship, but it encourages borrowers to call customer service to discuss their options.

3. SoFi

Student loan refinancing provider SoFi lets you pause payments for a few reasons. Along with a general forbearance policy, SoFi offers deferment for economic hardship, unemployment or military service. It will also defer your payments while you’re in school. To submit a deferment or forbearance request, you’ll need to contact SoFi’s servicing partner, MOHELA.

As a SoFi member, you can also benefit from its career coaching program, which helps you search for jobs and transition into a new career.

4. CommonBond

CommonBond offers both private student loans and student loan refinancing. If you took out a cosigned loan for school, you’ll get a 60-month academic deferment, including the grace period. This means you won’t have to pay your loan while you’re in school or for a few months after graduation. Depending on your circumstances, you can also apply for up to 12 months of forbearance.

If you get a Master of Business Administration loan from CommonBond, you’re eligible for 32 months of academic deferment and 12 months of forbearance. Finally, CommonBond’s refinanced student loans are eligible for 32 months of academic deferment and 24 months of forbearance, which can be used three months at a time.

5. Laurel Road

Laurel Road allows forbearance for up to 12 months if you run into financial hardship. The provider, which funds graduate student loans and refinanced student loans, reviews forbearance requests on a case-by-case basis.

As for students in school, it’s up to you if you want to make payments on your loan or defer them until after you graduate. Laurel Road does not offer in-school deferment on its refinance student loan products.

6. Earnest

Earnest offers private student loans and refinanced student loans. If you go back to school, you can defer your Earnest student loan payments for up to 36 months as long as you’re enrolled at least half time.

And if you run into financial hardship, you can apply to skip a payment or put your loans into forbearance.

7. Education Loan Finance

Student loan refinancing provider Education Loan Finance offers 12 months of forbearance for financial hardship or disability over the term of your student loan. You’ll need to apply each month to keep your loan in forbearance. If you don’t contact Education Loan Finance each month, your loan will come out of forbearance and full repayment will resume.

Explore all your options before pausing payments

Deferment and forbearance options can be a godsend if you’re struggling to keep up with payments on your student loans. But both are a temporary solution, and your loans could get more expensive over time.

Before applying for deferment or forbearance, look into alternative ways to adjust your student loan payments. You might put federal loans on an income-driven plan, for instance, or refinance private student loans to get a new term.

While pausing payments can bring immediate relief, don’t forget to account for long-term costs before making changes to your repayment plan.

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Rebecca Safier
Rebecca Safier |

Rebecca Safier is a writer at MagnifyMoney. You can email Rebecca here

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