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Deferment and Forbearance

Deferment

A deferment is a period of time, upon meeting certain qualifications, that you are entitled to not make payments towards your FFELP loans. The Government pays the accrued interest on Subsidized loans during periods of deferment. You are responsible for the accrued interest on Unsubsidized Stafford, SLS, PLUS and Unsubsidized Consolidation Loans.

There are many deferment types available to you, depending on your situation. One qualifying factor is the disbursement date of your first outstanding FFELP loan. If you took out your first loan before July 1, 1993, you may be eligible for different deferments than if your first loan was disbursed after July 1, 1993.

If you have a TREE^SM or LEAF^SM Loan, you may be eligible for a TREE^SM or LEAF^SM deferment.

ALPS (Alternative Loans for Parents & Students) loans are not eligible for deferment.

Forbearance

Forbearance is an agreement between the borrower and the lender/servicer to cease payments on your Federal Stafford or PLUS loan(s) for a period of time. Forbearance can be requested when you are experiencing difficulty in making your monthly payments and do not qualify for a deferment.

No matter what type of loan(s) you have, you are responsible for all interest that accrues on your loan(s) while in forbearance. You will continue to receive monthly statements that will show the interest as it accrues on your account. You can make monthly interest payments, make a larger interest payment towards the end of your forbearance or allow the interest to capitalize when the forbearance ends. Capitalization is when the unpaid interest is added to the principal.

To request a forbearance, please email us or call us at 1-800-719-0708 8am to 6pm M-F EST.

ALPS, TREE^SM and LEAF^SM loans are not eligible for forbearance.

Capitalized Interest

Capitalization is a process by which a lender adds unpaid interest to the principal balance of a loan that accrues during periods of deferment or forbearance. You are responsible for paying the interest that accrues from the date an unsubsidized federal Stafford, SLS, PLUS or alternative loan is disbursed.

During periods of deferment for unsubsidized federal Stafford, SLS, PLUS and alternative loans (if applicable), you are responsible for the interest that accrues.  During periods of forbearance, all loan types, including federal subsidized Stafford loans, are subject to capitalized interest if the accruing interest is not paid prior to the end of the forbearance period.

You can make payments on the interest as it accrues, or you can have the accrued interest capitalized into the principal balance at the end of the deferment period.  If you do not make interest payments while you are in school or during periods of deferment (for loans that are not subsidized) and forbearance, the principal balance of your loan may increase by the amount of capitalized (unpaid) interest.
 

Forms Mailing Information

Please print, read and complete the correct deferment form for your situation. Return the completed form and any required documentation (ie: paystubs, proof of unemployment registration, proof of SSI or TANIFF benefits, etc) to GSM&R.

Mail completed deferment forms to:

GSM&R
PO Box 2097
Concord, NH 03302-2097

OR

Fax to: (603) 227-5401

If you need assistance completing your deferment form, please call one of our customer service representatives at 1-800-719-0708 from 8 a.m. to 6 p.m. EST, M-F, or leave a voice mail message 24 hours a day and your call will be returned the next business day. You may also e-mail us at customerservice@gsmr.org.