July 10, 2009, Newsletter Issue #127: Postponing Payments on Your Perkins Loan

Tip of the Week

If you are having trouble meeting the required payments each month on your Federal Perkins Loan you may be able to postpone them for a while. This would give you enough time to organize your financial situation in order to successfully resume paying off your loan.

There are two options for postponing payments. The first is called deferment. In this case, your payments are temporarily postponed and no interest accrues on your account. This is not an automatic fix, however. You must apply for and be granted a deferment by your school or the company employed to manage your loan.

This can be requested during times of active military service in a war, in the event of being unable to find full-time employment, proven economic hardship (including Peace Corps Service), or if you return to a college or graduate school in at least a half-time capacity. Deferment can extend up to three years.

Forbearance is the next option if you do not qualify for deferment. Under this method, you can reduce or temporarily postpone payments, however, interest will continue to accrue on your principal loan.

If approved, forbearance may be granted in intervals of up to 12 months for no more than three years. The borrower must also provide documentation of the need to use this option.

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