Many people need to take out student loans to help cover the costs of their under graduate or post graduate college education. There are several different types of loan which can be granted to a student as an individual (as opposed to their parents) and the most common two types are the Perkins Loan and the Stafford Loan. These are applied for by the student, who submits an application for called the Free Application for Federal Student Aid (normally shortened to FAFSA).
This form is evaluated, and the type and amount of aid that can be awarded to that student in the form of loans and grants is decided. All other costs are expected to be met by the student and their parents (in the case of students who are their parents’ dependents, rather than mature students), who can, if they need to, apply for an additional loan called a PLUS Loan or Parent PLUS Loan to further fund schooling.
All Student Loans need to be paid back in full, however in many cases your lender will allow you to defer repayments whilst you are still in education if you have a student loan like the Perkins Loan or the Stafford Loan. This type of deferment is called an “In School Deferment”. Other types of deferment can sometimes be available in other circumstances such as financial hardship. Deferring repayment of a student loan with an In School Deferment will not harm your credit rating.
To be eligible for an In School Deferment on your loan, you must be enrolled at least half time on a course at an eligible institution. Your Financial Aid Office will be able to tell you if you meet these requirements, i.e. if your enrollment is half time or more, and if your school is eligible. Most colleges are, and the list of eligible institutions includes schools outside of the US as well, so even if you are studying abroad you may be able to get your In School Deferment. A list is available of the Department of Education’s website, where you can search for your school and see if it qualifies.
To apply for an In School Deferment you have to complete a form and send it to your lender. Your lender will supply the right form, but you will need someone in authority at your school to complete some sections of it and supply evidence in the form of documentation if required. Your lender can ask you to give evidence for anything you put on this form, so make sure you are able to quickly provide details to back up any claims on your In School Deferment request to avoid any issues or hold ups further down the line.
Once your In School Deferment has been granted, it will remain in place either until your expected date of graduation or until your enrollment level drops below the required half time minimum. You will then need to start repaying your loan, or alternatively, if you decide to continue in post graduate education, request another In School Deferment with details of your new course of study and again, evidence of your eligibility.
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