Student Loan Repayment: What Is an Economic Hardship Deferment?

An economic hardship deferment is a postponement of student loan payments for 12 months based on the fact that the student loan payments are too hard for the borrower to make because of a job loss or payments taking a large percentage of the borrower's monthly income. An application must be filed which shows how much money the borrower makes and shows that the borrower cannot afford to meet the monthly student loan obligation while also meeting the other obligations in terms of housing and food. While the economic hardship deferment application is in the process of being approved or denied, you need to continue making payments as required by the terms of the loan or you will risk harm to your credit report. If you cannot make payments while you wait for your deferment application to be approved, you can ask for a forbearance for a couple of months. The forbearance does not require an application and will keep your account in good standing without requiring a payment.

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