If you find yourself unable to service your student loan, a loan deferment may be just what you are looking for. The bank offers a variety of deferment options that can be applied to Federal Family Education Loan Program (FFELP) borrowers. The interest still accrues during the limited time deferment period, unless your loan is subsidized Stafford loan, where the government pays the interest.
Wells Fargo also only offers deferment for loans that the bank services and private loans are excluded from this deferment program.
The Department of Education allows deferment on Federal Stafford loans, Federal PLUS loans, and Federal Consolidation Loans.
The following are requirements that have to be met for a Wells Fargo student loan deferment:
- Economic Hardship: Borrowers must not have an outstanding balance on any FFELP loans made on or before July 1, 1993, make less than minimum wages or less than 150% of the poverty line income by size of household, or exceed a debt to income ratio as federally defined.
- Education Related: This applies to borrowers who are enrolled in graduate programs, internship/residency programs, or are completing rehabilitation training.
- In School: Borrowers have to be enrolled at least half time at eligible schools. Options can include deferment of interest or principal, or both.
- Military: Active duty service members or National Guard members performing certain duties can apply for deferment on loans disbursed on July 1, 2001, or after.
- Parental Leave: This is for borrowers who are pregnant, caring for a child or adopted child, not attending school or working less than 30 hours a week. At least half time enrollment is required six months prior to commencement of deferment.
- PLUS Borrower And Dependent Student: Parent borrowers have to have the student enrolled at least half tome at an eligible school. This can also be used by parent borrowers with loans disbursed on July 1, 2008 for the six month period after the student leaves school or drops below half time enrollment.
- Public Service: This includes active duty in the U.S. Armed Forces, the National Oceanic and Atmospheric Administration, the Public Health Service, the Peace Corps, or ACTION Program volunteers.
- Disability: This is defined as unable to attend school or work for at least 60 days due to illness or injury sustained after receiving the loan, as well as caring for spouses or dependents for at least 90 consecutive days, preventing borrowers from working at least 30 hours a week.
- Unemployment: Full time employment is defined as working at least 30 hours a week in a position expected to last at least 3 months. Proof of reasonable job search is required.
Of course, student loan deferment does not in any way mean cancellation of obligation.