Financial Aid In-School Loan Deferments for students of CMU Off-Campus Programs

Financial Aid In-School Loan Deferments

A deferment is one way in which payments on your current student loan account may be postponed. Deferments are available as entitlements to borrowers who meet certain specified conditions. This means that if you provide your lender, in a timely fashion, with a request for deferment that fully documents your eligibility for that deferment, your lender must grant the deferment.

The compressed format and registration process of CMU off-campus courses further complicates this procedure. Students typically register for one course every session, which may not qualify them for the minimum number of credit hours required for an in-school deferment. Students should be aware of this potential delay and should continue to make their monthly payments until they receive confirmation about the deferment.

Interest on deferred loans

If you have loans that are subsidized (i.e., you were not responsible for the interest accruing on them while you were in school), the interest accruing on them during a deferment will be paid by the federal government. If you have loans that are not subsidized, you will be responsible for the interest that accrues on them during periods of deferment. You may arrange to pay this interest to your lender as it accrues; or, you may elect to have the accrued interest capitalized. In that case, the accrued interest and the principal balance are added together. Then interest accrues on that new total.

Six-month grace period

When you separate from school by graduating, or stop taking classes for some other reason, your student loans become due for payment. You can request a one-time six-month grace period to delay the start of repayment on your loan.

Remember, the six-month grace period is offered only once. So, if you have already used the full grace period during an earlier separation from school, you are not eligible for another six-month grace period.

If, however, you return to school and receive a new loan, you would be eligible for a grace period on the new loan. When you separate from school again, your earlier loans would go into immediate repayment unless you ask your lender for a forbearance to realign your repayment.

National Student Loan Clearinghouse

Central Michigan University participates in the industry-sponsored consortium, the National Student Loan Clearinghouse. The university reports monthly the enrollment status of all students to the Clearinghouse. The Clearinghouse is responsible for providing status and deferment information to guaranty agencies, lenders, servicers, and the Department of Education’s National Student Loan Data System. The Clearinghouse process identifies those borrowers who:

withdraw from school and need to begin repayment;
transfer from one school to another;
return to school and may be eligible for a deferment; and
continue in school and are eligible for deferment extension.

For information on how to access the clearinghouse, visit: http://netconnect.cmich.edu/helppages/help_studentclearing.htm

In school deferment forms

In school deferment forms for most lenders are available on the Internet. Following are links to some of these sites.