How Can I Defer My Student Loans?

Student loan deferment offers a temporary pause in repayment obligations, allowing borrowers to suspend monthly payments during specific life circumstances or financial difficulty. This process helps individuals manage finances without defaulting on their student loans. It serves as a safety net, preventing borrowers from falling behind on payments during challenging times.

General Eligibility for Deferment

Eligibility for student loan deferment depends on the loan type. Federal student loans offer more comprehensive options than private loans. Most federal loans are eligible if not in default, and borrowers are typically in good standing or within their grace period.

Private student loans lack standardized deferment options, as programs are at the lender’s discretion. Borrowers with private loans should contact their loan servicer to inquire about temporary payment relief. Federal student loans, including Direct Subsidized, Unsubsidized, PLUS, and some FFEL Program loans, have established criteria that, if met, mandate deferment approval.

Common Deferment Types and Requirements

Several common types of deferment are available for federal student loans, each with specific eligibility criteria and documentation requirements. These options assist borrowers facing circumstances that impede their ability to make payments.

In-School Deferment

In-school deferment is often automatically applied if a borrower is enrolled at least half-time at an eligible college or career school. If this automatic deferment does not occur, borrowers can request it through their school’s financial aid office, which will verify their enrollment status with the loan servicer. Parent PLUS Loan borrowers can also qualify for in-school deferment while the student for whom they borrowed is enrolled at least half-time, though they typically must apply for it.

Unemployment Deferment

Unemployment deferment is available for borrowers who are unemployed and actively seeking full-time employment, or who are receiving unemployment benefits. This deferment can be granted for up to three years. Required documentation often includes proof of unemployment benefits or a signed statement affirming the borrower’s unemployment and active job search efforts.

Economic Hardship Deferment

Economic hardship deferment can be granted for up to three years, requiring borrowers to reapply annually to confirm continued eligibility. Qualification criteria include receiving certain means-tested federal or state public assistance benefits, or working full-time with earnings below 150% of the poverty guideline for their family size. Supporting documentation might include benefit statements, income tax returns, or recent pay stubs.

Military Service Deferment

Military service deferment is an option for borrowers serving on active duty during a war, military operation, or national emergency. A post-active duty student deferment may also be available for a period after service ends. To qualify, borrowers must provide official military orders or a statement from their commanding officer confirming their active duty status.

Graduate Fellowship Deferment

A graduate fellowship deferment is available for those enrolled in an approved graduate fellowship program. This requires certification from an authorized official confirming the borrower’s acceptance and full-time participation in the program.

Applying for Deferment

Applying for student loan deferment involves specific steps once eligibility is determined and documents prepared. Borrowers typically need to obtain the appropriate deferment request form, which is usually available on their loan servicer’s website or the Federal Student Aid website. It is crucial to select the correct form corresponding to the specific type of deferment being requested.

After completing the form, borrowers must gather all required supporting documentation, such as enrollment verification, unemployment benefit statements, or income records. This complete application package should then be submitted directly to the student loan servicer. Keep copies of all submitted documents and send the application via a method that allows for tracking, such as certified mail.

Borrowers should continue making their regular loan payments until they receive official notification that their deferment request has been approved. Processing times can vary, often taking several weeks. The loan servicer will communicate the decision, including details about the deferment period or reasons for denial if the application is incomplete or rejected.

Understanding Deferment’s Impact

Deferring student loans has implications for a borrower’s overall repayment, extending beyond the temporary suspension of payments. A primary consideration is interest accrual, which differs significantly between subsidized and unsubsidized federal loans. During deferment, interest does not accrue on Direct Subsidized Loans or Federal Perkins Loans, meaning the loan balance does not increase.

However, interest continues to accrue on unsubsidized federal loans, Direct PLUS Loans, and generally on private student loans during a deferment period. If this accruing interest is not paid during deferment, it is capitalized, meaning it is added to the principal balance when repayment resumes. This increases the total loan amount and overall cost.

While deferment generally does not negatively impact a borrower’s credit score if properly granted, it does extend the overall repayment term of the loan. When the deferment period concludes, repayment obligations resume, and the loan servicer will provide notification before the first payment is due. If financial difficulties persist after deferment, borrowers might explore other options, such as income-driven repayment plans.