How to Defer Student Loan Payments

Types of Deferment

Student loan deferment offers a temporary pause in repayment when borrowers face specific circumstances, allowing them to suspend payments without the immediate accumulation of interest on certain loan types. This option provides financial relief during periods of hardship or life transitions. While payments are paused, the borrower can focus on addressing their current situation, knowing their loan account remains in good standing. For eligible federal subsidized loans, interest does not typically accrue during an approved deferment period.

Several categories of deferment exist for federal student loans, each with distinct eligibility requirements designed to address various life events. An “In-School” deferment, for example, is typically available to borrowers enrolled at least half-time at an eligible postsecondary school. This deferment usually applies automatically if the school reports enrollment status to the National Student Loan Data System (NSLDS), though borrowers should confirm its application with their loan servicer.

“Unemployment” deferment is an option for borrowers actively seeking full-time employment, typically allowing for a pause in payments for up to three years. To qualify, a borrower must be receiving unemployment benefits or be registered with a public or private unemployment agency and actively searching for work. Similarly, an “Economic Hardship” deferment may be granted for up to three years, often requiring the borrower to have an income below 150% of the poverty guideline for their family size and state, or to be receiving certain federal public assistance benefits.

Other deferment options address specific professional or personal situations. A “Graduate Fellowship” deferment is for individuals in an approved graduate fellowship program. “Military Service” deferment is available to borrowers serving on active duty during a war, military operation, or national emergency, or immediately following such service. A “Cancer Treatment” deferment allows a pause during treatment and for six months afterward.

Borrowers enrolled in an approved “Rehabilitation Training” program for disabled individuals can also qualify for deferment. A “Parental Leave” deferment can be granted for up to six months to new parents who are pregnant, caring for a newborn, or caring for a newly adopted child. While interest does not accrue on subsidized loans during deferment, it continues to accrue on unsubsidized federal student loans and all private loans.

Understanding Forbearance

Forbearance offers another pathway for borrowers to temporarily postpone student loan payments, serving as an alternative when deferment eligibility criteria are not met. This option provides a short-term payment suspension, granted for periods up to 12 months, and can be renewed if financial hardship persists. Unlike deferment, interest accrues on all types of federal student loans—both subsidized and unsubsidized—during forbearance.

The primary distinction between forbearance and deferment lies in interest accrual; interest on all loan types continues to grow during forbearance, potentially increasing the total amount repaid. Forbearance can be discretionary, granted by the loan servicer due to financial difficulties, medical expenses, or other reasons, or it can be mandatory. Mandatory forbearance is required in specific circumstances, such as for borrowers serving in AmeriCorps, performing certain medical or dental internships, or those whose monthly student loan payment exceeds 20% of their gross monthly income.

Applying for Deferment or Forbearance

Initiating a request for either student loan deferment or forbearance begins with contacting your loan servicer. The loan servicer is the entity responsible for managing your student loan account, and they provide the necessary forms and guidance for applying. Their contact information, including phone numbers and website addresses, can typically be found on your monthly billing statement or by logging into your online loan account.

Once contact is established, the loan servicer will direct you to the appropriate application forms. These forms are often available for download directly from the servicer’s website, or they may be accessible through the official Federal Student Aid website, StudentAid.gov. It is important to use the specific application form relevant to the type of deferment or forbearance you are seeking, as each form outlines the precise documentation required to support your request.

The application process requires submitting specific documentation to verify your eligibility for the requested pause in payments. For an in-school deferment, proof of enrollment from your educational institution is required. If applying for unemployment deferment, documentation such as unemployment benefit statements or registration with an employment agency is necessary. For economic hardship, income verification or proof of receipt of qualifying public assistance benefits is requested.

After completing the application and gathering all required documents, submit them to your loan servicer. Many servicers offer online portals for secure document uploads. Alternatively, applications and documentation can be submitted via mail or fax. Keep copies of all submitted documents and confirm receipt with your loan servicer.

Managing Your Loans During and After a Pause

Understanding the financial implications of pausing student loan payments is important for sound financial planning. While interest does not accrue on subsidized federal loans during deferment, it continues to accrue on unsubsidized federal loans and all private loans. During forbearance, interest accrues on all types of federal student loans, potentially increasing the total amount owed when payments resume.

Maintaining accurate contact information with your loan servicer is important throughout any period of deferment or forbearance. This ensures you receive timely notifications regarding your request status, payment pause end date, and loan account updates. Regularly checking your loan servicer’s online portal also provides current information on your loan balance, accrued interest, and the remaining duration of your deferment or forbearance.

As the end of a payment pause approaches, prepare for the resumption of payments. Your loan servicer will notify you before your deferment or forbearance period concludes, providing details on your new monthly payment amount and due date. This notice provides an opportunity to assess your financial situation and determine if your current repayment plan remains affordable.

Exploring alternative repayment options before payments restart can help manage your debt effectively. Federal student loan borrowers have various income-driven repayment (IDR) plans available, which adjust monthly payments based on income and family size. Investigating these options with your loan servicer can help ensure your payments are manageable and prevent potential default once the pause concludes.