Do My Student Loan Payments Stop If I Go Back to School?

Returning to higher education often raises questions about existing student loan obligations. Understanding how enrollment impacts repayment is important for managing personal finances and avoiding default. Federal student loan programs offer specific provisions that allow borrowers to temporarily pause payments while in school, supporting continued education without immediate repayment burdens.

Eligibility for In-School Deferment

In-school deferment allows federal student loan borrowers to postpone payments if they meet specific enrollment criteria. To qualify, a borrower must be enrolled at least half-time at an eligible educational institution. This includes most accredited colleges, universities, and vocational schools participating in federal student aid programs.

Most federal student loan types are eligible, including Direct Subsidized, Unsubsidized, and PLUS Loans, Federal Family Education Loan (FFEL) Program loans, and Federal Perkins Loans. Private student loans have different terms set by individual lenders; borrowers should contact their private lender to understand options. Past use of deferments or forbearances does not typically prevent receiving an in-school deferment if current eligibility requirements are met.

Activating Your In-School Deferment

For many federal student loan borrowers, in-school deferment occurs automatically. This happens when the educational institution reports the borrower’s enrollment status to the National Student Loan Data System (NSLDS). The loan servicer then receives this information and applies the deferment to qualifying loans. Borrowers should confirm with their school’s registrar or financial aid office that their enrollment information is being reported to NSLDS.

If deferment does not activate automatically, or if specific loan types require it, a manual application is necessary. Contact your loan servicer to inquire about the “In-School Deferment Request” form. This form typically requires enrollment certification from the educational institution and must be submitted to the loan servicer.

If payments continue to be due despite eligibility, immediately contact your loan servicer to resolve the issue. During in-school deferment, interest typically accrues on unsubsidized federal loans, Direct PLUS Loans, and FFEL PLUS Loans. However, the Department of Education generally pays interest on subsidized federal student loans during approved deferment periods. Maintaining current contact information with the loan servicer is important for timely updates and to avoid repayment misunderstandings.

What Happens After Deferment Ends

Once a borrower drops below half-time enrollment or graduates, the in-school deferment period concludes. Most federal student loans then enter a grace period, which typically lasts for six months. Payments are not required during this time, allowing borrowers time to prepare for repayment. Note that if a grace period was previously used, they may not receive a new one after a subsequent in-school deferment.

As the grace period or deferment nears its end, loan servicers generally send communications detailing the upcoming repayment schedule. These notices provide information about the first payment due date and the amount. Review these notifications carefully and update any contact information with your servicer to ensure you receive all important documents.

When repayment begins, loans will typically revert to the standard repayment plan unless an alternative is selected. If the standard payment amount is not manageable, borrowers can explore other repayment options, such as income-driven repayment plans. These plans adjust monthly payments based on income and family size. Preparing for repayment involves verifying loan details, understanding the new payment schedule, and ensuring financial readiness for the upcoming obligations.