A hardship deferment is a temporary suspension of student loan payments granted to someone who is experiencing difficulties with repayment. Depending on the lender and the nature of the difficulties, the length of the deferment varies, and typically interest will continue to accrue on the loans for the duration of the deferment. In order to receive a hardship deferment, someone must specifically apply to the lender to ask for hardship consideration.
Many lenders are very flexible about granting hardship deferments, within reason. If someone loses his or her job, experiences unexpected expenses, or lives in an area with a very high cost of living, a deferment for hardship will often be readily granted. Especially if the lendee only wants to put off payments for one month, a deferment can usually be obtained.
To apply for a hardship deferment, it is usually necessary to contact the lender and explain the situation. For temporary deferments like a one month deferment, sometimes a loan officer can simply make a note in the account granting the deferment. For longer deferments, usually an application will need to be filled out detailing the applicant's income, expenses, and the situation for which the deferment is requested.
It is a good idea to apply for a hardship deferment as soon as a hardship is identified, rather than to wait until right before a payment is due. While some lenders will suspend payments as they review the deferment, if the deferment is rejected, the applicant will be expected to make up for any missed payments. Others expect payment until the deferment is granted, and missing a payment can be grounds for denial.
Once a hardship deferment is approved, a formal letter will be sent to the applicant stating that he or she has been granted a deferment, and what the length of the deferment is. Fewer are longer than six months: people who need long-term deferments may be required to keep applying. A lender may also revoke a deferment if it decides that the applicant is capable of making payments again, and applicants can also end the deferment by making a payment if they feel that they are ready to start paying on their loans.
In addition to hardship deferments, most lenders offer a six month “grace period” during which no payments are due. Many people choose to use this period during the six months after graduation, but grace period months can often be used at other times. Some lenders also allow people to periodically miss payments by arrangement, especially if people always pay on time and have good reasons for needing to miss a payment.