Gap Year and College Loan Repayment

Question: I just completed my freshman year of college and would like to take a year off to do community service abroad and to reevaluate what my future career plan will be. I am wondering how that will impact re-entering sophomore year at my college when I return. Is this considered a deferment even though I have completed my first year? Please advise. Also, what about my current loans? Can payment be deferred or just interest paid? Thank you.

Taking a "gap year" while in college is a common practice, and you shouldn't have too much difficulty arranging with your current school to do so. However, each college has its own policies, so you'll have to check with a dean or other administrator to see how to proceed. Chances are, you will take an official leave of absence, which means that the college will hold a place for you when you return from your time off. Deferred students entering freshman year typically must submit a deposit to have their place held but leave-of-absence students often do not.

When it comes to your loans, you will also have to check with the financial aid office at your school since the answer will depend on the type of loans you have. For instance, the Federal Stafford Loan has a grace period of six months but the Federal Perkins Loan has a grace period of nine months before repayment begins. Thus, if you decide to take a leave of absence, you wouldn't have to repay such loans until the end of this grace period. Given the duration of these grace periods, you may decide that your needs are better suited by taking off just a semester rather than an entire year.

In either case, you need to speak to officials at your own college--both academic administrators and the financial aid staff--to find out how to best pursue your goals.