If you are unemployed and receiving benefits, you can get a deferral on your federal student loans. But you do need to get into the deferment as soon as possible.
This is because, unlike an economic hardship deferment, which is retroactive to the date the hardship began, an unemployment deferment can only go back six months.
How do you qualify for an unemployment deferment? Well, there are two ways:
- Be registered with a public or private employment agency located within 50 miles of your home (and be seeking work)
- Provide proof of eligibility for unemployment benefits
The deferment, once you get it, is good for a maximum period of time:
- 2 years if there is a loan balance prior to July 1, 1993
- 3 years if all your loans originated after July 1, 1993
Should you find yourself out of a job, the first thing you need to ask yourself is whether this situation creates an economic hardship. If it does, get that deferment to keep from going into default, and then look to see if an income based repayment plan can help.