Deferring student loans means temporarily pausing your monthly payments for a set period, usually due to specific situations like returning to school, economic hardship, or military service. During a deferment, interest may or may not accrue depending on your loan type. This guide explains how deferment works, who qualifies, and what it means for your overall loan balance.
How Student Loan Deferment Works
When you defer a federal student loan, your lender agrees to let you stop making payments for a defined time. You must apply for deferment through your loan servicer and provide proof that you meet the eligibility criteria. If approved, you won’t have to make payments during the deferment period, but the loan doesn’t disappear.
For subsidized federal loans, the government pays the interest that accrues during deferment. For unsubsidized loans, interest continues to build, and that interest is added to your principal balance when the deferment ends. This means your total debt can grow even though you aren’t making payments.
Eligibility for Student Loan Deferment
Not everyone can defer their student loans. The U.S. Department of Education allows deferment for specific situations. Common reasons include:
- Enrollment at least half-time at an eligible college or career school
- Unemployment or inability to find full-time work (for up to three years)
- Economic hardship, such as receiving public assistance or serving in the Peace Corps
- Active duty military service or post-active duty service
- Cancer treatment or rehabilitation (for up to 13 months after treatment)
You must apply each time you need a deferment, and you’ll need to provide documents like enrollment verification or proof of unemployment. Private student loans may offer deferment too, but terms vary by lender—always check your loan agreement.
Deferment vs. Forbearance: Key Differences
Deferment and forbearance both pause payments, but they differ in how interest is treated. Deferment is usually better for subsidized loans because the government covers interest. Forbearance, on the other hand, always requires you to pay interest, even on subsidized loans.
| Feature | Deferment | Forbearance |
|---|---|---|
| Interest on subsidized loans | Paid by government | You must pay or it capitalizes |
| Interest on unsubsidized loans | Accrues and may capitalize | Accrues and may capitalize |
| Eligibility | Specific situations (school, hardship, military) | Financial hardship, illness, other circumstances |
| Typical maximum period | 3 years for unemployment/hardship | 12 months at a time, up to 3 years total |
Always try deferment first if you qualify because it saves you money on interest. If you don’t qualify, forbearance is a backup option, but it can increase your total debt significantly.
How to Apply for Deferment
Applying for deferment is straightforward but requires action on your part. Follow these steps:
- Contact your loan servicer to request a deferment application.
- Fill out the form and attach required documents (e.g., proof of enrollment, unemployment claim).
- Submit the application before your next payment due date, if possible.
- Keep a copy of everything and note the approval date.
- Mark your calendar for when the deferment ends so you can resume payments on time.
If you have multiple federal loans, you may need to apply for deferment separately for each loan. Your servicer can tell you if you’re eligible. Don’t assume you’re automatically deferred—always apply.
What Happens After Deferment Ends?
When your deferment period ends, you must start making payments again. Your servicer will send you a statement showing your new payment amount, which may be higher if interest capitalized. If you’re still struggling, you can request an income-driven repayment plan or another deferment if you qualify.
Missing payments after deferment can lead to default, which hurts your credit and may result in wage garnishment. To avoid that, contact your servicer as soon as you know you can’t pay. They can help you explore options.
Summary: What Deferment Means for You
Deferring student loans gives you temporary breathing room, but it’s not a free pass—interest can still grow. Use deferment wisely: apply only when you truly need it, and keep track of when payments resume. If you have subsidized loans, deferment is especially beneficial because the government covers interest. Always communicate with your servicer to stay in good standing.
Frequently Asked Questions
How long can I defer my student loans?
For federal loans, deferment for unemployment or economic hardship can last up to three years, while in-school deferment lasts as long as you are enrolled at least half-time.
Does interest accrue during student loan deferment?
Interest does not accrue on subsidized federal loans during deferment, but it does accrue on unsubsidized loans and private loans, and that interest may be added to your balance.
Can I defer private student loans?
Many private lenders offer deferment, but terms vary; check your loan contract or contact your lender to see if you qualify.
What is the difference between deferment and forbearance?
Deferment is usually better because the government pays interest on subsidized loans, while forbearance always requires you to pay interest on all loans.
How do I apply for student loan deferment?
You apply through your loan servicer by submitting a deferment request form along with proof of your eligibility, such as enrollment verification or unemployment documentation.
