Two concepts you should be familiar with when you are considering repayment of your loans are deferment and forbearance.

Loan deferment refers to postponing the repayment of your loan. Federal Direct, Stafford and Perkins loans allow you to defer your repayment if you are enrolled at least half-time in school. Other deferment options can be pursued in cases of unemployment, severe economic hardship, etc. You must apply for a deferment with your lender. During the deferment period, if you have a subsidized loan, the federal government pays the interest charges. If you have an unsubsidized loan, you are responsible for the interest that accrues during the deferment period. You can still postpone paying the interest charges by capitalizing the interest, which increases the size of the loan. If you don't qualify for a deferment, you may be able to get a forbearance. You can't get a deferment if your loan is in default.

During a forbearance period your loan holder allows you to temporarily postpone repaying the principal on your loan, but the interest charges continue to accrue (even on subsidized loans), and you must pay them during this period. You must apply for a forbearance with your loan holder, and forbearances are granted at the loan holder's discretion, usually in cases of extreme financial hardship or other unusual circumstances, and when you do not qualify for a deferment. You can't receive a forbearance on your loan if it is in default.

To find more about specific deferment and forbearance options and to print deferment and forbearance forms, please visit Texas Guaranteed Student Loan Corporation's (TG) For Borrowers web site.

If you are returning to school after a semester (or more) off, be sure to contact your loan holder to request an in-school deferment. For Stafford loans, go to the TG Deferment Forms page or the Federal Student Aid Deferment Forms page for Federal Direct loans.