How to Apply for Student Loan Unemployment Deferment

If you're unemployed and worried about making your student loan payment, this article will help you understand some of your options.

It might feel hard to keep up with your student loan payments if you’re currently unemployed. The good news is that you may be able to qualify for unemployment deferment on our loans. If approved, you’ll be able to pause your student loan payments temporarily, which could free up your time to search for a new job. 

If you’re interested in applying for student loan unemployment deferment, here’s what you need to know. 



An Overview of Unemployment Deferment

Unemployment deferment is used as a way to pause your student loan payments temporarily if you’ve lost your job. It works differently for both federal and private student loans. 

Federal Loans

If you want to temporarily pause your loan payments, you can apply for unemployment deferment for up to three years. In order to qualify, you’ll need to demonstrate that you’re unable to find full-time employment and eligible to receive unemployment benefits. 

Private Loans

It’s up to the discretion of your lender whether or not they’ll grant you unemployment deferment, or any type of deferment for that matter. That’s why you’ll have to check with your lender to see what your choices are when you can’t afford to make your loan payments.

If you decide to move ahead with unemployment deferment, interest may stop occurring during that time. However, you’ll need to make sure whether this is the case or not. 


How to Apply for Student Loan Unemployment Deferment

Applying for unemployment deferment will depend on the type of loan you have. Make sure you have the type of documentation you need to increase your chances of being approved.

Federal Student Loans

Those with federal student loans can go through their loan offer in order to apply for unemployment deferment. You can also start by downloading an application form through the Department of Education’s website. Your loan officer should also direct you to any other types of forms you may need. 

Alongside your application form, you’ll also be required to submit relevant documents that show your job search history and ones that prove you’re eligible for unemployment benefits.

Private Student Loans

First, check with your lender to see whether they offer deferment in the first place. If so, then ask your lender what you need to apply, such as forms and documentation needed. 

Unfortunately, not all private student loan lenders will offer deferment if you’re unemployed. However, you may be able to apply for forbearance which can offer some temporary relief. In most cases, interest will continue to accrue — your loan balance will grow. 

After applying for determent, make sure to keep making your monthly payments. That’s because your deferment period hasn’t officially started yet — missing payments could mean you’re risking being in default. You can pause your payments once your loan servicer confirms your deferment has been approved. 



Length of Deferment Period

Once you’ve been approved for deferment, you’re probably wondering how long the deferment period will last. The answer is that it depends on the type of loan.

For federal student loans, your deferment period will generally be approved for anywhere from six to 12 loans — it’ll depend on the exact loan you have. If you’re still unemployed afterwards, you may be able to qualify for unemployment deferment for up to three years. To remain eligible, you’ll have to keep showing documentation that you’re attempting to look for full-time employment and are eligible to receive unemployment benefits. 

Contrast this to private student loans, where ultimately the length of your deferment will be up to your lender. If your unemployment deferment period is going to end and you still haven’t found full-time employment, contact our lender as soon as possible. You may be able to work out a new plan, or at least see what your options are. 


What You Can Do Instead of Applying for Unemployment Deferment

Whether it’s because your lender doesn’t offer unemployment deferment or you can’t qualify for it, you have several other options. The following choices can help you afford your payments while you're busy looking for a job. 

Applying For Forbearance

Forbearance is another option that helps you temporarily pause your student payments. If you apply, you’ll be able to pause your payments for an approved amount of time — it’ll depend on the type of loan you took out. 

Like mentioned briefly above, interest will continue to accrue if you’re approved for forbearance. You’ll want to keep that in mind because you don’t want to be surprised when you start making payments again and you see a larger loan balance.

Income Driven Repayment Plans

Those who took out federal student loans may be able to sign up for an income driven repayment plan. Once approved, these plans will help to lower your monthly payment amounts based on your income. It can also extend your repayment term, giving you more breathing room. In many cases you may even be able to have your outstanding balance forgive after 20 to 25 years.

Your options include:

  • Income-Based Repayment (IBR)
  • Pay As You Earn (PAYE), Revised Pay As You Earn (REPAYE)
  • Income-Contingent Repayment (ICR).

Contact your loan servicer about any of the above options to see what you may qualify for and whether it’s the right choice.



Refinancing Your Student Loans

Refinancing your student loans is generally a good idea because it can help you reduce the overall amount you pay in loans by lowering your interest rate. It can also lower your monthly payments — whether it’s because you're extending your loan term or your rate has gone down.

In most cases, you’ll need to have good credit to qualify for the most competitive refinancing rates. That’s not to say that if you have less than stellar credit you won’t qualify. Keep in mind that if you’re refinancing your federal loan to a private one, you’ll lose federal benefits such as student loan forgiveness programs and income driven repayment plans. 

That being said, it doesn’t hurt to see how much you can save — start by shopping around as many lenders to find the right fit. Luckily, Juno has made this easy for you by doing the research and leveraging their resources to negotiate low refinancing rates. There’s no need to commit — check out your refinancing options to help you continue to afford your student loan payments. 



Sarah Li Cain
Written By
Sarah Li Cain

Sarah Li Cain is a finance writer and a candidate for the Accredited Financial Counselor designation whose work has appeared in places like Bankrate, Business Insider, Financial Planning Association, Investopedia, Kiplinger, and Redbook. She’s the host of Beyond The Dollar, where she and her guests have deep and honest conversations about money affects their well-being.

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