Interviewer: What are the typical student loan rates for loans that can be deferred or forbeared? Just to put a quick number on it: If you had a 6% loan and it was forbeared for a year and it was $100,000 loan, it would earn about $6000 worth of interest?
The Student Loan Will Accrue a High Interest Rate While in Forbearance
A. Campbell: That’s correct, yes. There could be a huge cost. When I talk about deferment, what I’m really saying is it’s an economic hardship issue. Deferment really means an economic hardship deferment.
There Is a Maximum of Three Years for an Economic Hardship Deferment
I should say economic hardship deferment because that by logic, that means you’re having some kind of economic hardship. When you’re saying I have an economic hardship, you do need to prove it. You need to show taxes. You need to show some proof that you are suffering from economic hardship. There is a total of three years maximum you can take for an economic hardship deferment.
A Deferment or Forbearance Is Only Granted for Government Student Loans
Interviewer: Student loans that can be deferred or forbeared, is that only for government loans or do private loans do that sometimes?
A. Campbell: No, private loans, you might get lucky if you can get a decent student loan lender, but a lot of times they won’t let you do that. The grace period programs are geared only towards governmental student loans.
The only option you have with a private student loan is if you are sued, you still have the defenses you could raise typically in any lawsuit that you could always raise.