How to Get a Student Loan Deferment or Cancellation

The U.S. Department of Education grants new college graduates between six and nine months of student loan deferments after graduation. Unlike student loan forbearance, which compounds interest on the entire principle balance, the subsidized portion of a deferred student loan -- the part backed by the government -- remains interest-free, thus costing you less when you start making payments. The deferment gives students time to find jobs and work student loan payments into their budgets. You could, however, qualify for a longer payment deferment or even have your student loans canceled, depending on your employment and life circumstances.

Instructions

1

Apply for student loan deferment if you are enrolled in a college or university, unemployed or serving on active study in the military or peace corps. Fill out deferment forms online by logging into the DOE's student loan servicing website if USDOE provided your student loans. You can also request deferment forms from your non-USDOE lender.

2

Teach in a low-income, K-12 public school or teach shortage subject areas. The DOE indicates that your lender could cancel part of your Stafford loan and up to 100 percent of the Perkins loan, sometimes called the National Direct Student Loan, if you accept such teaching jobs on a full-time basis. You must remain in the teaching job for at least five years to receive the benefit. Teaching shortage subject areas vary by the state.

3

Accept a public service job. Nurses, police officers, peace corps workers, active duty military serving in combat zones and some social services workers qualify for student loan cancellation, depending on the type of loan borrowed. You must send official documents from your employing organization to your lender for cancellation consideration.

4

File for bankruptcy. The Department of Education says student loan discharges resulting from bankruptcy are possible, although rarely granted. You must prove to the bankruptcy court that repaying your student loan would cause financial hardship, even taking income-adjusted payments, deferments and forbearance options into consideration.