Having Difficulty with Repayment
If you have difficulty making payments on your student loan, contact your loan servicer as soon as possible. There are options that may help you make your payments and/or resolve your delinquency. If you received your loans before July 1, 2010, and your loans are guaranteed by KHEAA, you can call KHEAA's Default Aversion section for assistance at 1.800.928.5327 or e-mail us at defaultaversion@kheaa.com.
Some of the options mentioned to you may include alternative repayment plans, loan consolidation, deferment or forbearance.
What's the difference between a deferment and a forbearance?
Interest – You are responsible for the interest that accrues during a period of forbearance. During a deferment, you are responsible for the interest that accrues if your loans are Unsubsidized Stafford Loans. If you have Subsidized Stafford Loans, you are not responsible for the interest that accrues during a deferment. You can pay the interest during a period of forbearance or deferment, definitely the cheaper route in the long run, or your loan servicer may capitalize the interest at the end of your deferment or forbearance. When interest is capitalized, it will increase the amount of interest you have to pay.
Discretionary versus Entitlement – This is a complicated way of simply saying that a loan servicer is under no obligation to allow you to have a forbearance. It is up to the loan servicer's discretion whether to grant you one or not. Deferments, on the other hand, are entitlements. That means that the loan servicer must grant you a deferment if you meet the appropriate criteria. Your loan servicer will help you determine if you meet the specific criteria for each type of deferment.
