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Deferred Student Loans

 Questions have been raised as to whether or not the student loans should be included in the repayment ratios. This is especially of concern when a payment on a deferred loan will begin within the next 12 months or even within the next 36 months and the amount of the payment on the student loan would cause the applicant to have a debt load they could not afford.

 The payment on a student loan that will not begin within 12 months should not be counted in the current ratios. However, student loans should be considered in a similar way as buydowns. The lender must document or show that the applicant will have increased income after the deferral period to support the increased debt load created by the student loan. 

LAURA J. MEADOWS
State Director

Please send any comments or suggestions to:   craig.scroggs@ga.usda.gov

Last Updated : February 06, 2003