Can I Defer My Student Loans? Eligibility and Process

Student loan deferment offers a way for borrowers to temporarily pause their payments under specific circumstances.

Understanding Student Loan Deferment

Student loan deferment allows borrowers to temporarily stop making payments on their federal student loans for a specified period. This temporary suspension can be a valuable tool for managing finances during challenging times, such as when experiencing unemployment or returning to school. While payments are paused, interest may or may not accrue, depending on the type of loan.

For federal student loans, interest generally does not accrue on Direct Subsidized Loans, Subsidized Federal Stafford Loans, Federal Perkins Loans, and the subsidized portion of Direct Consolidation Loans during a deferment. However, for Direct Unsubsidized Loans, Unsubsidized Federal Stafford Loans, Direct PLUS Loans (including Parent PLUS Loans), and the unsubsidized portion of Direct Consolidation Loans, interest continues to accrue during deferment. If this accrued interest is not paid, it will be added to the principal balance at the end of the deferment period, which can increase the total amount repaid over the life of the loan.

Deferment and forbearance both temporarily suspend loan payments but have key differences. Deferment is typically tied to specific qualifying events and, for certain loan types, prevents interest from accruing. Forbearance, on the other hand, allows for payment suspension due to financial difficulties or other reasons, but interest always accrues on all loan types during a forbearance period. Additionally, deferment is often considered an entitlement if a borrower qualifies, whereas forbearance can sometimes be granted at the loan servicer’s discretion.

Forbearance periods are generally granted for up to 12 months at a time, while deferment lengths vary depending on the type, but federal programs often have a maximum of three years.

Eligibility for Deferment

Federal student loan deferment is available for various circumstances, each with specific requirements borrowers must meet. One common type is the In-School Deferment, which applies if a borrower is enrolled at least half-time at an eligible college or career school. In many cases, this deferment is applied automatically when the school reports enrollment status to the loan servicer. For graduate or professional students with Direct PLUS Loans, an additional six months of deferment may be available after they cease to be enrolled at least half-time.

Another type is the Unemployment Deferment, available for borrowers who are receiving unemployment benefits or are actively seeking and unable to find full-time employment. To qualify under the “seeking employment” criterion, borrowers typically must certify that they have made at least six diligent attempts to find full-time work within a specific period. This deferment can be granted for up to three years.

Economic Hardship Deferment is an option for individuals experiencing significant financial difficulties. Eligibility often includes receiving means-tested government benefits like welfare or Supplemental Security Income (SSI), or working full-time with earnings below 150 percent of the poverty guideline for their family size. Peace Corps volunteers also qualify for economic hardship deferment. This deferment can also last for up to three years, typically taken in one-year increments.

Military Service and Post-Active Duty Student Deferment is available for those serving on active duty in connection with a war, military operation, or national emergency. This deferment can last as long as the borrower is on active duty and for an additional 180 days following the completion of qualifying military service. A Post-Active Duty Student Deferment is also available for certain National Guard or reserve members who were enrolled at least half-time when called to active duty, lasting up to 13 months following service completion or until resuming half-time enrollment.

A Graduate Fellowship Deferment is an option for borrowers enrolled in an approved graduate fellowship program. To qualify, the program must generally provide sufficient financial support for full-time study for at least six months and require a written statement of objectives from applicants. It also necessitates periodic reports or evidence of the fellow’s progress. Other less common deferment types include Cancer Treatment Deferment and Rehabilitation Training Deferment, each with specific conditions.

Applying for Deferment

After determining eligibility for a specific deferment type, the next step involves submitting an application to the loan servicer. Most deferments are not automatically granted, requiring the borrower to submit a request. The initial action is to identify the loan servicer, which can typically be done through the Federal Student Aid website by logging in to access loan details.

Once the servicer is identified, the borrower needs to locate the correct application form for the specific deferment type they are seeking. These forms are usually available on the loan servicer’s website or the Federal Student Aid website. The application will require specific information about the borrower and the circumstances qualifying them for deferment.

Along with the completed form, borrowers must gather and submit any required documentation that proves their eligibility. For instance, an in-school deferment might require the school to certify enrollment status, while an unemployment deferment may need proof of unemployment benefits or documentation of job search efforts. Military service deferments require copies of military orders or a statement from a commanding officer.

It is important for borrowers to continue making their regular loan payments until they receive official confirmation that their deferment request has been approved. Failing to do so could result in the loan becoming delinquent, which may negatively affect credit. After submission, processing times can vary, and borrowers should monitor their loan status and communicate with their servicer for updates and confirmation of the deferment’s start date.