[Code of Federal Regulations]
[Title 34, Volume 3]
[Revised as of July 1, 2007]
From the U.S. Government Printing Office via GPO Access
[CITE: 34CFR674.38]

[Page 592-593]
 
                           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 593]]

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]