Loan Deferment

Many post-graduate service participants will need to pay back student loans at some point after graduation. Service Programs often provide assistance and help with necessary forms in support of your application for deferment of payment. Each participant will have the specifics worked out on a case-by-case basis.

Most loans have a six to nine month grace period after graduation before repayment begins. If you consolidate your loans, you often forfeit the grace period. You need to apply for a deferment or forbearance before the grace period expires. Contact your bank/lending institution for specific information (or check out their website).

With an economic hardship deferment, interest payments are usually expected, but they can be delayed if arrangements are made to add the interest that accrues to the principle. These arrangements are usually made by just marking the appropriate box on the deferment request form.

To defer your loan(s), you will have to present the petition to the bank/lending institution. Upon acceptance into the program, you will have to contact your lending institution for their policy regarding loan deferment and submit required forms to the service program office. It is important that this be done before volunteer orientation begins to allow sufficient time for forms to be processed.

Many institutions do expect service program participants to begin paying back the loans upon leaving the program. You need to foresee this situation and make plans accordingly.

AmeriCorps: Many service programs receive AmeriCorps Education Awards for those participating in programs. These awards provide an "educational award" for loan repayment or future education upon completion of the program, as well as interest payments. It is hoped that these awards will be available in future years, but funding is uncertain at this time.

A note about loan consolidation: consider keeping your Perkins loans separate as there are opportunities to have the loan canceled if you work or teach in underserved areas after your time as a volunteer.

Helpful websites and documents:

http://studentaid.ed.gov/PORTALSWebApp/students/english/repaying.jsp

http://www.fafsa.com/deferments.htm

Become a Student Loan Expert: A Crash Course for Volunteer Programs

compiled by the Catholic Network of Volunteer Service

Federal Loan Deferment & Cancellation Summary

For more information, call (574) 631-5779 or e-mail cscstp@nd.edu.