How to Defer My Student Loans: The Process and Options

Student loan deferment offers a temporary suspension of loan payments for borrowers facing specific circumstances. It provides financial relief by allowing individuals to pause their obligations for a designated period. Deferment is distinct from forbearance, primarily concerning interest accrual; during a deferment, interest may not accrue on certain types of federal loans, whereas interest typically accrues on all loan types during forbearance. This temporary pause can prevent a loan from entering default during times of financial strain or other qualifying life events.

Qualifying for Deferment

Various circumstances can qualify borrowers for student loan deferment, with eligibility depending on the type of federal loan held.

In-School Deferment

Loans are automatically deferred if a borrower is enrolled at least half-time at an eligible college or career school. This deferment can also extend for an additional six months after enrollment ceases for graduate or professional students with Direct PLUS Loans.

Unemployment Deferment

This deferment is available for up to three years, requiring either receipt of unemployment benefits or actively seeking and being unable to find full-time employment.

Economic Hardship Deferment

This can provide relief for up to three years to borrowers experiencing significant financial difficulty. Eligibility is typically tied to receiving federal or state public assistance, serving in the Peace Corps, or having an income below a certain threshold, such as 150% of the federal poverty guideline for family size and state.

Military Service Deferment

This is available for those on active duty in the U.S. armed forces, including National Guard members called to active duty, and can extend for a period following active service.

Other Deferment Types

Graduate fellowship deferment for those enrolled in approved graduate fellowship programs.
Cancer treatment deferment for individuals undergoing cancer treatment and for a period after treatment concludes.
Rehabilitation training deferment for borrowers enrolled in approved rehabilitation programs for vocational, drug abuse, mental health, or alcohol abuse treatment.
Parent PLUS borrowers can also qualify for deferment while the student for whom the loan was taken is enrolled at least half-time.

Gathering Application Information and Documents

To apply for student loan deferment, borrowers must identify the specific type of deferment relevant to their situation and gather the necessary information and documents. Required information varies by deferment type but generally includes personal identifying details like Social Security number, name, address, and contact information.

Specific Documentation Needs

In-school deferment: Enrollment dates and school information.
Unemployment deferment: Documentation proving eligibility for unemployment benefits or evidence of diligent job search attempts.
Economic hardship deferment: Detailed income information, such as recent pay stubs or federal income tax returns, and details about public assistance received.
Military service deferment: Proof of active duty status, including military orders or a statement from a commanding officer.
Graduate fellowship deferment: Certification from an authorized official of the fellowship program confirming acceptance and anticipated completion date.

Official deferment forms are typically available on the Federal Student Aid website or through your loan servicer’s website. Each deferment type usually has a dedicated form.

Submitting Your Deferment Request

Once all necessary information and documents are gathered and the appropriate deferment form is completed, submit the request to your federal student loan servicer. Most deferments require borrowers to actively submit an application. Submission methods vary, but commonly include mailing the completed form and supporting documentation directly to the loan servicer. Some servicers may also offer the option to fax documents or submit them through an online portal. Continue making payments until you receive notification that your deferment request has been approved to avoid delinquency.

Managing Your Loan During and After Deferment

Upon approval of a deferment request, borrowers will be notified by their loan servicer, and payments will temporarily cease for the approved period.

Interest Accrual During Deferment

Interest typically does not accrue on federal subsidized loans and Perkins Loans during deferment, meaning the loan balance will not increase. However, interest continues to accrue on unsubsidized federal loans, Direct PLUS Loans, and FFEL Program loans during deferment.
Borrowers with unsubsidized loans are responsible for the interest that accrues. They can choose to pay this interest as it accrues, or allow it to capitalize. Capitalization means the interest will be added to the principal balance at the end of the deferment period. If interest capitalizes, the total amount owed will increase, potentially leading to higher monthly payments and a greater overall cost of the loan.

Preparing for Repayment

As the deferment period approaches its end, your loan servicer will typically notify you that payments are set to resume. Prepare for re-entering repayment by reviewing your repayment options and understanding your new monthly payment amount. If financial circumstances have not improved, or if a new qualifying event has occurred, it may be possible to apply for another deferment or explore alternative repayment plans, such as income-driven repayment plans.