Dear Heather,

First, thank you for answering everyone’s questions.  I scanned through many pages of them and found your answers quite useful.  I also searched to see if anyone asked a question similar to mine, but found that mine is quite unique.  I am sure that this question will put your “expert” qualification to the test.  The advice is for my daughter.

She graduated with a BA from Univ. Calif. Santa Barbara in 2009, where both she and I obtained loans to cover the costs.  Her five loans are Stafford Direct, and her balance is about $20k, currently in repayment with no blemishes.  My PLUS loans started out at about $40k and now the balance is about $15k.

After graduating from Santa Barbara, she continued to complete a Master’s program from Universidad Melendes Pelayo based in Spain, and was able to easily obtain a deferment because she was back in school and UMP is a “US Dept. of Education recognized” academic institution.  UMP is a small school, and relatively unknown internationally.

After completing the Master’s, she then got approved for a PhD program through the Universidad
Complutense of Madrid.  In this program, she obtained a fellowship from Spain’s National Museum of Natural Sciences, doing research under an advisor.  This is a four year program, where she receives a small stipend for living expenses (about $1000 per month), completes her research assistant functions, and completes her own PhD research project.  As part of this program, she is enrolled at Universidad Complutense of Madrid, one of the most prestigious in the country, With a student population of 98,000 and founded in the year 1293 - about 200 years before Columbus discovered America!  UC will issue her Doctorate Degree when she completes the four year fellowship.  (We are very proud of her!)

She applied to the Dept. of Education for a new deferment, based on her now being a student again.  They denied her “graduate studies deferment” because Universidad Complutense is not on a list of approved schools.  (We have not been able to find this list anywhere).  We understand unoficially that UC is not on this list because no one has applied to SL for deferment from this school, and not because of any shortcomings of the school itself.  It seems to us that the criteria for inclusion in this list are quite arbitrary.

This was quite disappointing to her, because in reality, her small stipend is not enough for living expenses AND the payments for her loans.  I would help her financially, but I am still paying her PLUS loans, I am 59 yrs. old and currently between unemployment and retirement…I do not wish to take on more financial responsibility.

She then learned that she can apply for a deferment based on her fellowship (Fellowship Deferment?).  She did so, and was again denied.  I believe the denial was because the grantor of the fellowship (the museum) is also not on the elusive list of approved institutions.

My questions for you are:

Is there any way she can appeal either of these denials?
By what process is a school (or museum) included on the “list of approved schools”?  Can an individual influence this?  How about if an authority at the school (or museum) makes the request?  Where can the list be seen?  What are the criteria?

If there is no way for her to obtain the deferment she seeks, then do you recommend any other way of reducing her payments to a level she can afford?  Is consolidation a good idea for her?  How about income based repayment?  What are the pros and cons of these options?

If you need more information or details to provide the best reply, please ask.

Thanks again,

Chof

Only enrollment at an “eligible” institution can support an in-school deferment or another deferment based on enrollment in some sort of educational program.  I put “eligible” in quotes, because the school would need to submit an application to the Department of Education in order to be determined eligible to participate in the federal student aid programs—even if the school does not actually want to participate in those programs.  These schools are referred to a “deferment-only” schools, where enrollment can lead to an in-school deferment, but a student cannot do things such as receive a Pell Grant or federal student loan.

And, the eligibility criteria that the Department of Education uses in evaluating a school is defined in statute.

There is a list of approved schools available, but it’s not in a very accessible format.  See here: http://www2.ed.gov/offices/OSFAP/PEPS/dataextracts.html.