What is the Economic Hardship Deferment?
Economic Hardship Deferment is an option that allows borrowers to defer payment on their federal student loans for up to three years if they meet certain eligibility requirements. During the deferment, the federal government continues to pay the interest on the subsidized portion of the resident’s loan portfolio. Interest on the unsubsidized portion of the borrower’s portfolio continues to accrue during this time. Am I Eligible? Eligibility for the Economic Hardship Deferment is based on an individual debt-to-income ratio. To qualify, a borrower must be employed full-time, the borrower’s federal education debt burden (defined as the required monthly payment) must be equal to or greater than 20 percent of the borrower’s monthly income, and the borrower’s income minus the education debt burden must be less than 220 percent of the greater of the minimum wage rate or the federal poverty line for a family of two. For a medical resident making the average first year resident stipend of $37,3
