Will I be able to defer my federal and Private Student Loans?

Will I be able to defer my federal and private student loans?

• I would like to do about a year's worth of volunteer work out of state starting in August of this year. I will be graduating in May. I will not be volunteering through a large, well know organization. My private lender is Sallie Mae. I searched the site and called them asking this question. The woman said I would just have to fill out a form saying i was unemployed when it came time to begin payment. I was not entirely convinced that this is all I would have to do. Also, direct loans has taken over student loans since i have been in school. I still don't quite understand it but would that mean I would have to get a deferment on my federal loans as well as my private loans? how would I go about doing this? Thanks.

• Answer:

  uh... "volunteering" is for folks who can afford it. Since you have outstanding loans that will be due, it doesn't sound like you have that luxury and need to volunteer WHILE you have a job after college. Be aware you only get so many months of "hardship payment deferrals" and VOLUNTEERING to be a hardship case (voluntarily not seeking employment and working) isn't exactly a wise choice right after college considering the economy and the knowledge that the longer you wait after graduating the harder it will be for you to get a job. "I was not entirely convinced that this is all I would have to do." Since this is a private loan, the company gets to decide if they want to grant the payment deferral to you. They don't have to if they don't want, and as I said before, you only get so many in the life of the loan and if you use them all NOW, in a few years you could get sick, really become UNWILLINGLY unemployed and then you'd still have to pay, because you CHOOSE not to work your first year out of college. "Also, direct loans has taken over student loans since i have been in school. I still don't quite understand it but would that mean I would have to get a deferment on my federal loans as well as my private loans? how would I go about doing this?" You go about it by calling the lender and filling out federal forms for a deferment. Direct loans is no different in their payments... you borrow money and you pay it back when it's time. That's it. Yes, you would need to request to NOT pay your federal loans as well... and like private loans, you only get so many months of non payment over the life of the loan. Be aware that for all your loans, you not paying on them is going to cost you a ton in the long run. Why? Because you will still be charged interest and it will be added on to the amount you owe. Say your federal loan accumulates 220 dollars that first month of your deferment in interest. If your balance is 20,000. After that first month, 220 will be added and you'll owe 20220... the second month, interest charged is on the 20220, so the amount added on the second month will be more.. say 225... so you now owe: 20220+225= 20550 total... then the next month the interest added will be more say 230 for the third month, the forth month it will be even MORE say 240 ... so you see how much this is going to cost you? Honestly, you can't afford to do this right out of college and you either need to make "interest only" payments, or just get a real job and volunteer part time.