How Long Is Deferment on Student Loans?

Student loan deferment offers a temporary solution for borrowers facing financial challenges or specific life events. It allows individuals to temporarily pause or reduce their student loan payments without incurring delinquency or default. This option provides relief when making regular payments would be difficult or impossible.

Understanding Student Loan Deferment

Student loan deferment provides a period where borrowers are not required to make payments on federal student loans. This temporary suspension differs from forbearance primarily in how interest accrues. During deferment, interest does not accrue on subsidized federal loans, preventing loan balance growth. However, interest generally continues to accrue on unsubsidized federal and all private loans.

This option is primarily available for federal student loans, which have a wide range of qualifying circumstances. Private student loans may offer limited deferment options, but their terms and availability vary significantly by lender and are typically less favorable than federal programs. Deferment serves as a temporary measure to manage financial obligations, not a permanent debt cancellation. Borrowers remain responsible for the full loan amount, plus any accrued interest, once the deferment period ends.

Common Deferment Types and Their Time Limits

The duration of student loan deferment varies by type and borrower circumstances. Each category has distinct eligibility criteria and maximum time limits. Borrowers typically need to provide documentation to prove eligibility.

• In-School Deferment: Available if you are enrolled at least half-time at an eligible college or career school. For many federal loans, this deferment applies automatically once the school reports enrollment. This deferment generally lasts as long as the borrower maintains at least half-time enrollment. A grace period, typically six months, usually begins after enrollment ceases or drops below half-time, before payments resume.
• Unemployment Deferment: Provides a temporary payment pause if you are unemployed or seeking full-time employment. This deferment can be granted for up to three years. To maintain eligibility, borrowers may need to reapply, sometimes every six months, and provide evidence of receiving unemployment benefits or actively searching for work.
• Economic Hardship Deferment: For borrowers experiencing significant financial difficulty, granted for up to three years, typically in one-year increments. Eligibility often depends on factors such as receiving federal or state public assistance, being a Peace Corps volunteer, or having an income below a certain threshold relative to the poverty guideline for your family size.
• Military Service Deferment: Available for those serving on active duty in the U.S. Armed Forces. This deferment lasts for the duration of active duty service. An additional post-active duty deferment period may be available, extending for up to 13 months after active duty ends or until the borrower re-enrolls in school at least half-time, whichever comes first.
• Cancer Treatment Deferment: For borrowers undergoing cancer treatment. This deferment is available for the period of active treatment and for an additional six months after treatment concludes. It can be re-certified if treatment extends beyond initial periods.
• Graduate Fellowship Deferment: For individuals enrolled in an approved graduate fellowship program. This deferment lasts for the period of enrollment in the full-time fellowship program.
• Rehabilitation Training Deferment: Available if you are enrolled in an approved rehabilitation training program. This deferment is available for the duration of enrollment in the qualifying program.
• Parental Leave Deferment: For Parent PLUS Loan borrowers. This deferment can be requested while the student for whom the loan was taken is enrolled at least half-time. An additional six-month deferment period may be available after the student ceases to be enrolled at least half-time.

Applying for Deferment

Most deferments are not automatically granted; borrowers must actively apply for them. First, contact your loan servicer, as they process deferment requests. You can find their contact information on your loan statements or the Federal Student Aid website. Your servicer will provide the correct deferment form for your request.

After obtaining the form, gather all required documentation to support your eligibility. This documentation varies by deferment type and may include enrollment verification, proof of unemployment benefits, income statements, or physician’s certifications. Accurately complete all sections of the form and attach all necessary supporting documents.

Once completed, submit your application to your loan servicer. Submission methods often include online portals, mail, or fax. Keep copies of all submitted documents for your records. Continue making regular loan payments until you receive notification that your deferment request has been approved to avoid delinquency. Following up with your loan servicer a few weeks after submission can help confirm receipt and approval.

Impact on Your Loan During Deferment

While deferment provides necessary relief from payments, it has important financial implications. One significant factor is interest accrual. For subsidized federal student loans and Perkins Loans, the government pays the interest that accrues during deferment, meaning your loan balance will not increase. However, for unsubsidized federal loans, Direct PLUS Loans, and all private student loans, interest continues to accrue during the deferment period. If this interest is not paid while in deferment, it will be added to your principal balance when the deferment ends.

This process is known as interest capitalization, where unpaid accrued interest is added to the loan’s principal balance. When interest capitalizes, your total loan amount increases, and future interest will be calculated on this larger principal. This can lead to a higher total repayment amount over the life of the loan and potentially higher monthly payments once repayment resumes.

Deferment also extends the overall repayment period of your loan, as the time you are not making payments does not count towards your original loan term. As your deferment period concludes, prepare for payments to resume. This includes understanding your new payment schedule and any changes to your loan balance due to accrued and capitalized interest.