What's the difference between Forbearance and Deferment?

[Poquelin]

Good Evening all,

I got married last month. My wife has a Federal Student Loan with Great Lakes. She is 4 months behind and owe's $2,000 in back payments. 

Is it possible to request Forbearance/Deferment from now until April 2015 and Is it possible to request they include the $2,000 in back payments as well? 

If so, Which program is better Forbearance or Deferment? I read the description of both but I don't understand the diference. 

One last question, Will placing a loan in Forbearance or Deferment negatively impact her credit score?

Thank you for in advance for the information.

Poquelin

[SCF]

Whether you place the loans in a deferment or forbearance depends on her specific circumstance.  A deferment is an entitlement - if you meet the qualifications and have not exhausted the duration of the deferment, it must be granted once the paperwork is processed.  A forbearance is granted by your servicer, and they may deny your request depending on the information you provide to them.

In some cirucmstances, the lender will include past due amounts and make the deferement/forbearance retroactive, but again, this depends heavily on the circumstances.

Why has she been unable to pay the loan?  What will change in April 2015?

Being in forbearance/deferment will not negatively impact her credit.  Each month the payments are postponed, they will be reported as  "paid as agreed."

[Poquelin]

Thank you so much for putting it in such simple and easy terms.

I understand now.

We submitted a request for Forbearance.

We'll see what happens.

[Pat94108]

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@Poquelin wrote:

Thank you so much for putting it in such simple and easy terms.

I understand now.

We submitted a request for Forbearance.

We'll see what happens.

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Just to add the other post. A request for deferment could be approved if your wife was unemployed or going back to school. Forebearance is usually at the discretion of the lender. In addition, the government will pay the interest on the subsidized loans during a deferment, but not forebearance. 

[Poquelin]

Hey! Great Lakes approved the Forbearance. 

We applied for it online on Firday night and today we checked and see they approved it till March 2015. We had originally asked till April 2015 but we'll take it. The account also doesn't show the $2000.00 in back payments.

Thank you all for the advice.