Perkins Loan Deferment Options

TABLE OF CONTENTS

• General Information
• Military Deferment
• Student Deferment
• Rehabilitation Training Deferment
• Economic Hardship Deferment
• Unemployment Deferment
• Forbearance

GENERAL INFORMATION

Contact the Office of Business Operations for the correct form to file for any of the deferment options listed or you can use the form printed on the bottom of the front page of all billing and grace ending notices that are sent to you.

There are different time limits for different deferments.

Not all deferments are available on all loans.

You must file a completed form with all the required documentation to be eligible for deferment. Our office will contact you when we receive the form and give you with the dates we used for the deferment, when the grace period will end, when a new form is due to be filed, and when payment will begin if no additional forms are received.

If you continue to receive bills or past due notices, but you think your deferment should have been processed, contact this office right away. Either there was an error made, or the form was not received, or there was something missing.

Either your form or your payment is due by the due date. Late forms report to the credit bureau the same as a payment made late.

All exit paperwork must be completed and returned to this office before any deferments will be processed.

TOP

MILITARY DEFERMENT

The Higher Education Reconciliation Act of 2005 (HERA) was enacted on February 8, 2006, and made several changes to the Higher Education Act of 1965, as amended (HEA). One of the changes that affects many Perkins Loans borrowers is the addition of a Military Deferment.

More information about this new deferment can be viewed in the below documents:

1. Military Deferment - Section 8007 of the Higher Education Reconciliation Act of 2005 - United States Code Cross-References

2. Pages 7 and 8 of Enactment of the Higher Education Reconciliation Act of 2005 Loan Issues (the text of which is copied below)

Effective July 1, 2006 , for all three loan programs (FFEL, Direct Loans, Perkins Loans), a new military deferment has been created, effective for loans for which the first disbursement is made on or after July 1, 2001 . On or after July 1, 2006, a qualified borrower may receive a deferment for a period in which he or she meets the qualifications after July 1, 2001. The deferment shall not exceed a total of three years, and applies only to periods during which borrowers are serving on active duty during a war or other military operation, or national emergency, or performing qualifying National Guard duty during a war or other military operation or national emergency. As a result, not all active duty military personnel are eligible for this new deferment. The HERA does not authorize the refunding of any loan repayment already made by a borrower at the time the deferment is granted.

In some cases, a borrower may be eligible for a military deferment on loans first disbursed on or after July 1, 2001, but ineligible for the deferment on older loans. A borrower consolidating loans first disbursed on or after July 1, 2001, is eligible for the new deferment on the entire Consolidation Loan, but only if all of the borrower's Title IV loans included in the Consolidation Loan were first disbursed on or after July 1, 2001.

For purposes of this new deferment, the following terms are defined in a new section 481(d):

• Active duty has the meaning for that term included in section 101(d)(1) of title 10, United States Code, but does not include active duty for training or attendance at a service school.
• Military operation means a contingency operation as defined in section 101(a)(13) of title 10, United States Code.
• Nation emergency means the national emergency by reason of certain terrorist attacks declared by the President on September 14, 2001, or subsequent national emergencies declared by the President by reason of terrorist attacks.
• Serving on active duty during a war or other military operation or national emergency means service by an individual who is a Reserve of an Armed Force ordered to active duty under section 12301(a), 12301(g), 12302, 12304, or 12306 of title 10, United States Code, or any retired member of an Armed Force ordered to active duty under section 688 of such title, for service in connection with a war or other military operation or national emergency, regardless of the location at which such active duty service is performed. This term also includes any other member of an Armed Force on active duty in connection with such emergency or subsequent actions or conditions who has been assigned to a duty station at a location other than the location at which such member is normally assigned.
• Qualifying National Guard duty during a war or other military operation or national emergency means service as a member of the National Guard on fulltime National Guard duty (as defined in section 101(d)(5) of title 10, United States Code) under a call to active service authorized by the President or the Secretary of Defense for a period of more than 30 consecutive days under section 502(f) of title 32, United States Code, in connection with a war, other military operation, or a national emergency declared by the President and supported by Federal funds.

Documentation establishing eligible active duty service for the new deferment may include a copy of the borrower's military orders, or a written statement from the borrower's commanding officer or personnel officer that the borrower is serving on active duty during a war or other military operation, or national emergency, or performing qualifying National Guard duty during a war or other military operation or national ermergency, as those terms are defined above.

TOP

STUDENT DEFERMENT

All Perkins Loans are eligible for student deferment as long as you are at least a half-time student. There is no time limit on student deferment. As long as you remain at least half time and this office is notified of your eligible attendance, you could continue to defer indefinitely.

We participate in a national database called the National Student Loan Clearinghouse (NSLC). All schools in the United States send their attendance information to NSLC and UNI can access that information for deferment purposes. UNI is automatically updated every week with a new file from NSLC, and adjust our deferments accordingly. Either they are applied or they are extended or they are reduced in the case of withdrawal or graduation.

Not all schools participate in the NSLC. If that is the case for your school, you will be required to file a paper form with our office. You may either download a form from www.ecsi.net and have it certified by your school, or you may ask the Registrar's Office at the school you are attending to send us an Enrollment Verification. We will apply your deferment based on the dates and credit hours you are carrying.

If you continue to get grace notices or bills or past due notices or a set of coupons from us, we do not have a deferment applied to your account. This could be either because you have not done your exit interview or we do not have verification of your enrollment. Contact us whenever you think your account should be in student deferment and you are receiving bills from us so we can get the correct documentation from you.

TOP

REHABILITATION TRAINING DEFERMENT

Participation as the recipient of services in a course of study in an approved rehabilitation training program for disabled individuals may qualify some Perkins Loan borrowers for deferment of repayment.

Only money borrowed under the Federal Perkins Loan program after 7/1/93 is eligible for this deferment.

To Qualify for Deferment: You must be receiving, or be scheduled to receive, training services under a program designed to rehabilitate disabled individuals.

Your Rehabilitation Agency:

A substantial commitment is defined as: a commitment of time and effort that would normally prevent an individual from engaging in full-time employment either because of the number of hours that must be devoted to rehabilitation or because of the nature of the rehabilitation.

To Receive the Deferment: Fill out and sign your form. Certification on the form by an official of the rehabilitation agency will verify the dates that you will be articipating. The agency will need to attach a letter verifying the rest of the criteria as listed in 1 and 2 above. We will make a determination of whether or not you qualify once we have received the completed form in this office.

General Process: Rehabilitation deferment will be applied no further into the future than one year, including the six-month grace period. This usually coincides with your anniversary date of starting your training and is a good reminder that a new form needs to be done. There is no time limit maximum for this deferment, so as long as you remain in an eligible program and file the proper forms, meeting all the criteria above, you will remain eligible to defer. A six-month grace period follows each period of deferment. During both the deferment and the grace period following, no payments are due and no interest accrues. You must file a new form every year to remain in a deferment status.

We will contact you during the grace period of your deferment to let you know when the deferment ends and that it is time to file a new form if you are still participating in the rehabilitation program. If you are finished with the program, the notices will tell you when repayment will start on your loan.

TOP

ECONOMIC HARDSHIP DEFERMENT

Economic hardship is indicated for those borrowers who:

1. Have large federal student loan debt compared to their income. You may be working full time (3 months at least 30 hours per week), part time, or you might not be working at all, or
2. Are receiving assistance from a federal or state source. Examples are, but are not limited to, AFDC, SSI, Food Stamps, or FIP, or
3. Have received an economic hardship on another federal student loan. An economic hardship deferment is different than a forbearance -- your documentation must state you have received an economic hardship deferment.

You Must Provide One of the Following:

1. Proof of your average monthly gross and net income. Copies of pay stubs or a letter from your employer is required.

2 . Proof that you are receiving public assistance. This must be from your agency and show the dates that you have been eligible.

3 . Proof that you have received an economic hardship on another federal student loan. This must be a copy of a letter from your lender/servicer showing it is under this type of deferment, not forbearance.

This deferment will defer your principal and interest and add a six-month grace period following. No payments are required during any of this time.

THREE-YEAR MAXIMUM ALLOWED OVER THE LIFE OF YOUR LOAN.

TOP

UNEMPLOYMENT DEFERMENT

Unemployment deferment is indicated if you have been looking for full-time employment but have been unable to find it. You are either not working at all, or working only part-time.

You Must Provide either proof from your unemployment office that you have signed up for benefits, a copy of pay stubs or a letter from your employer showing only part-time work, or, if none of these is available, an affidavit written by you.

An affidavit written by you must show the dates you became less than full-time, general circumstances, explain that you are looking for full-time work, but have been unable to find it, and how long you think you will be in this status.

This deferment will defer your principal and interest a nd add a six-month grace period following. No payments are required during any of this time.

THREE-YEAR MAXIMUM ALLOWED OVER THE LIFE OF YOUR LOAN. 

TOP

FORBEARANCE

Forbearance deferment is indicated if your situation does not fit into either the economic hardship or unemployment criteria. Forbearance is indicated when your present financial circumstances don't allow you to make your payments, or you have poor health, or you are required to care for a family member with poor health, or you are on a national military mobilization or you are working for Ameri-Corps as a volunteer (under a reimbursement agreement with them), or for some other acceptable reason.

Documentation that is required should back up the reason you are applying for this deferment.  For example, if you are on military mobilization a copy of your orders would be appropriate or if you are in poor health, a statement from your doctor stating you are unable to work full-time based on your health would be appropriate.

You are required to complete a simple financial statement, provide a copy of your pay stub, and provide documents to substantiate this information.

Interest can be paid either in a lump sum payment at the end of the forbearance or you may pay it monthly during the deferment. You need to make that decision. If you do not indicate a choice, it will automatically be done as a lump-sum payment following the deferment.