[Code of Federal Regulations]

[Title 34, Volume 3]

[Revised as of July 1, 2005]

From the U.S. Government Printing Office via GPO Access

[CITE: 34CFR674.38]



[Page 585-586]

 

                           TITLE 34--EDUCATION

 

 CHAPTER VI--OFFICE OF POSTSECONDARY EDUCATION, DEPARTMENT OF EDUCATION

 

PART 674_FEDERAL PERKINS LOAN PROGRAM--Table of Contents

 

                        Subpart B_Terms of Loans

 

Sec. 674.38  Deferment procedures.



    (a)(1) Except as provided in paragraph (a)(2) of this section, a 

borrower must request the deferment and provide the institution with all 

information and documents required by the institution by the date that 

the institution establishes.

    (2) In the case of an in school deferment, the institution may grant 

the deferment based on student enrollment information showing that a 

borrower is enrolled as a regular student on at least a half-time basis, 

if the institution notifies the borrower of the deferment and of the 

borrower's option to cancel the deferment and continue paying on the 

loan.

    (3) If the borrower fails to meet the requirements of paragraph (a) 

(1) of



[[Page 586]]



this section, the institution may declare the loan to be in default, and 

may accelerate the loan.

    (b)(1) The institution may grant a deferment to a borrower after it 

has declared a loan to be a default.

    (2) As a condition for a deferment under this paragraph, the 

institution--

    (i) Shall require the borrower to execute a written repayment 

agreement on the loan; and

    (ii) May require the borrower to pay immediately some or all of the 

amounts previously scheduled to be repaid before the date on which the 

institution determined that the borrower had demonstrated that grounds 

for a deferment existed, plus late charges and collection costs.

    (c) If the information supplied by the borrower demonstrates that 

for some or all of the period for which a deferment is requested, the 

borrower had retained in-school status or was within the initial grace 

period on the loan, the institution shall--

    (1) Redetermine the date on which the borrower was required to 

commence repayment on the loan;

    (2) Deduct from the loan balance any interest accrued and late 

charges added before the date on which the repayment period commenced, 

as determined in paragraph (c)(1) of this section; and

    (3) Treat in accordance with paragraph (b) of this section, the 

request for deferment for any remaining portion of the period for which 

deferment was requested.

    (d) The institution must determine the continued eligibility of a 

borrower for a deferment at least annually, except that a borrower 

engaged in service described in Sec. Sec. 674.34(e)(6), 674.35(c)(3), 

674.36(c)(2), 674.37(c)(2), and Sec. 674.60(a)(1) must be granted a 

deferment for the lesser of the borrower's full term of service in the 

Peace Corps, or the borrower's remaining period of eligibility for a 

deferment under Sec. 674.34(e), not to exceed 3 years.



(Approved by the Office of Management and Budget under control number 

1845-0019)



(Authority: 20 U.S.C. 425, 1087dd)



[52 FR 45754, Dec. 1, 1987, as amended at 53 FR 49147, Dec. 6, 1988. 

Redesignated and amended at 59 FR 61410, 61411, Nov. 30, 1994; 64 FR 

57531, Oct. 25, 1999; 64 FR 58315, Oct. 28, 1999]