Pros And Cons Of Student Loan Deferment

Q: For current college graduates that are still unemployed with student loan payments becoming due, what are some of the pros and cons of student loan deferment?

A: If you are unable to afford your student loan payments, you will want to look into your deferment or forbearance options before missing any of your student loan payments. It is never a good idea to start missing student loan payments, as this can lead to default and credit problems that can last years into the future. Unemployment, extreme economic hardship and/or active military duty are all factors that may qualify you for a temporary postponement of your student loan payments via a deferment.

The pro of student loan deferment is it can be one option to help you avoid default in the event that you can not make your student loan payments. The cons of student loan deferment, are that you may not qualify for student loan deferment, and if you have private student loans there may be no deferment option for borrowers. Also, if your student loans are not subsidized, you will most likely be responsible for the interest that accrues during the deferment period, which will increase the total amount you owe on the loans. Typically, for private student loans, you are always responsible for the interest that accrues during the deferment (or forbearance) period (if one is offered by the lender).