If you are unable to make the payments on your New Jersey CLASS loan, it is possible to get a deferment or a forbearance from the Higher Education Student Assistance Authority (HESAA) to keep you from going into default. This can be done under certain conditions, and can allow you to defer payments of interest and/or loan principal for specified periods of time.
Deferments and forbearances are different, and which one you pick should be a strategic, informed choice. So I have set forth below information on both of them as offered by HESAA to aid you in that choice.
Deferments
Some deferments may only be granted if both the borrower and co-borrower qualify. During periods of authorized deferment, interest continues to accrue and will be payable once the deferment is over. The following are available NJ CLASS Program deferments and their requirements.
There are several kinds of deferments available, and they all depend on why you need to stop making payments temporarily. They also have conditions that have to be met in order to qualify, and all involve the accrual and capitalization of interest diring the deferment.
Types of Deferments
Full-time and half-time study at an eligible institution. While you are in school, the loan is deferred.
Unemployment. If you are unemployed, you can seek a deferment, but there are conditions.
Service as an Intern or Resident. Medical students can get a deferment while an intern or resident, but there are some conditions to this as well.
Active duty status in the Armed Forces.You can get a deferment here, but you must provide a statement from your commanding officer attesting to full-time active duty status.
Peace Corps.You can get a deferment for this, but you must submit a request and provide the Authority with a statement from an official of the Peace Corps program certifying:
- That you have agreed to serve as a volunteer on a full-time basis for at least one year;
- The date on which your service began; and
- The date on which your service is expected to end.
Temporary Total Disability. If you become injured and unable to work or go to school, then you can get a deferment if you meet these conditions.
Forbearances
What about forbearances? Well, HESAA may also, at its discretion, grant you periods of forbearance. It will only be granted if both the borrower and co-borrower qualify for the forbearance. It may be granted for situations including, but not limited to, economic hardship (as defined for federal student loans). But again, there are conditions.
- The maximum allowable time period for economic hardship forbearance cannot exceed six months for loans with a 10-year repayment term, 18 months for loans with a 15-year repayment term, 24 months for loans with a 20-year repayment term, 30 months for loans with a 25-year repayment term and 36 months for loans with a 30-year repayment term.
- In granting a forbearance, HESAA permits a temporary cessation of principal payments and temporarily permits payments of interest only, or a temporary cessation of both principal and interest payments. Interest continues to accrue during all forbearance periods.
Looking for More Information?
Looking for more solutions? Thinking more long term than the time a deferment or forbearance will buy you? Then check out the information in my free book, Paying for Your Classes with a CLASS Loan: A Survival Guide to HESAA. It will tell you about all of your options and which one might work for you!
Need someone to guide you through the process? Someone who has helped a lot of people find the right solution to their HESAA student loans? If you live New Jersey and need more personalized assistance with your situation, then call my office at 856-432-4113 to schedule an appointment or contact me by e-mail. You need to act now; the longer you wait, the fewer options are available!
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