Student loan deferment lets you temporarily pause your federal student loan payments for a specific period, usually up to three years. During deferment, you may not be required to make payments, but interest may still accrue on certain loan types. This option can provide financial relief if you face hardship, return to school, or experience other qualifying life events.
How Student Loan Deferment Works
Deferment is not automatic—you must apply through your loan servicer. Your servicer reviews your request and determines if you qualify under federal rules. If approved, your payments stop for the deferment period, but the loan balance may grow if interest continues to accrue.
For subsidized federal loans, the government pays the interest during deferment. For unsubsidized loans, interest accrues and is added to your principal balance when deferment ends. This means you could owe more than you originally borrowed.
Types of Deferment
There are several types of deferment, each tied to a specific situation. Below is a table summarizing the main types and their typical maximum durations.
| Deferment Type | Eligibility | Maximum Duration |
|---|---|---|
| In-school deferment | Enrolled at least half-time at an eligible school | While enrolled + 6 months |
| Unemployment deferment | Unemployed or unable to find full-time work | Up to 3 years |
| Economic hardship deferment | Receiving public assistance or serving in Peace Corps | Up to 3 years |
| Military service deferment | Active duty or qualifying National Guard service | While on duty + 13 months |
Eligibility for Deferment
To qualify for deferment, you must have federal student loans, not private loans. Private lenders may offer their own forbearance options, but they are not required to follow federal deferment rules. Your loan type matters—Direct Loans, FFEL Loans, and Perkins Loans each have specific deferment provisions.
Common qualifying situations include:
- Enrollment in an eligible college or career school at least half-time
- Unemployment or inability to find full-time work
- Economic hardship, such as receiving federal or state public assistance
- Active military duty or post-active-duty service
- Participation in a graduate fellowship or rehabilitation training program
How to Apply for Deferment
Contact your loan servicer to request a deferment form. You will need to provide documentation that proves your eligibility, such as enrollment verification or proof of unemployment. Submit the completed form and any required documents to your servicer before your due date to avoid late fees.
Your servicer must notify you of the approval or denial in writing. If approved, you will receive a new repayment schedule that starts after the deferment ends. If denied, you can appeal or consider forbearance as an alternative.
Deferment vs. Forbearance
Deferment and forbearance are both ways to pause payments, but they differ in interest handling. Deferment is often better for subsidized loans because the government pays interest during the pause. Forbearance always accrues interest on all loan types, which can increase your total debt significantly.
Forbearance is typically easier to obtain and may be granted for reasons not covered by deferment, such as medical expenses or a change in employment. However, it is usually limited to 12 months at a time, with a maximum of 3 years total.
Which Option Should You Choose?
If you qualify for deferment, especially on subsidized loans, it is generally the better choice. If you do not qualify, forbearance may provide short-term relief. Always compare the long-term cost—deferment on unsubsidized loans still accrues interest, so it may not save you money.
Impact on Loan Forgiveness and Credit
Deferment does not hurt your credit score because you are not missing payments—you are legally excused from them. However, it also does not count toward income-driven repayment plans that lead to loan forgiveness. For Public Service Loan Forgiveness (PSLF), deferment periods generally do not count as qualifying payments.
If you are pursuing loan forgiveness, you may need to make additional payments after deferment to meet the required number of qualifying payments. Keep track of your payment count and consult your servicer for specific guidance.
Actionable Tips for Borrowers
- Apply early—processing can take several weeks.
- Set a calendar reminder for when deferment ends to resume payments on time.
- Consider making voluntary interest payments during deferment to avoid capitalization.
- Review your loan balance after deferment to understand the new total.
Final Thoughts
Student loan deferment is a valuable tool to manage temporary financial challenges, but it is not a long-term solution. Understand the interest implications and how it affects your overall repayment plan. If you are unsure whether deferment is right for you, contact your loan servicer to discuss your options and make an informed decision.
Frequently Asked Questions
How long can I defer my student loans?
Most deferments last up to three years, but in-school deferment lasts as long as you are enrolled at least half-time plus six months.
Do I have to pay interest during deferment?
It depends on your loan type—subsidized loans do not accrue interest during deferment, but unsubsidized loans do.
Can I defer private student loans?
Private lenders are not required to offer deferment, but some may have similar options—check with your lender.
How do I apply for student loan deferment?
Contact your loan servicer to request the appropriate deferment form, complete it, and submit required documentation.
Does deferment affect my credit score?
No, deferment does not hurt your credit score because payments are legally paused, but it may not count toward loan forgiveness.
