When Can Borrowers Postpone Federal Student Loan Payments?

Federal student loans offer options to temporarily pause or reduce monthly payments during specific circumstances. Two primary categories provide this temporary relief: deferment and forbearance. Each has distinct eligibility criteria and implications for a borrower’s loan balance.

Federal Loan Deferment Options

Federal student loan deferments allow borrowers to temporarily postpone payments under various qualifying conditions. These deferments are entitlements, granted if a borrower meets specific eligibility requirements. Interest typically does not accrue on subsidized federal loans during deferment periods.

In-School Deferment

Borrowers enrolled at least half-time in an eligible college or career school may qualify for In-School Deferment. This often occurs automatically, as schools report enrollment status to loan servicers. If not automatic, borrowers submit a request certified by a school official or verification letter. Graduate or professional students with Direct PLUS Loans may receive an additional six months of deferment after ceasing half-time enrollment.

Unemployment Deferment

Unemployment Deferment is available for borrowers receiving unemployment benefits or actively seeking full-time employment. Full-time employment is defined as working at least 30 hours per week for three months. This deferment can be granted for up to 36 months, requiring six-month reapplication with documentation like unemployment benefit statements or certifications of active job searching.

Economic Hardship Deferment

Borrowers facing financial challenges may be eligible for Economic Hardship Deferment. This applies if they receive federal or state public assistance, serve as a Peace Corps volunteer, or work full-time with a gross monthly income below 150% of the federal poverty guideline. Eligibility requires documentation like proof of public assistance, Peace Corps service verification, or recent pay stubs and federal tax returns. This deferment can be granted for up to three years, with annual reapplication.

Graduate Fellowship Deferment

Graduate Fellowship Deferment is available for those enrolled in an approved graduate fellowship program. To qualify, a borrower needs at least a bachelor’s degree and a recommendation for full-time acceptance into the program. Documentation includes a certified request or signed letter from an authorized program official confirming enrollment dates and program eligibility.

Rehabilitation Training Deferment

Borrowers undergoing specific treatment can seek Rehabilitation Training Deferment. This applies to enrollment in approved programs providing vocational, drug abuse, mental health, or alcohol abuse rehabilitation. The program must be licensed or recognized by a state agency or the Department of Veterans Affairs, include a written individualized plan, and require a substantial commitment. Documentation involves a certified request or signed letter detailing the program’s nature and duration.

Cancer Treatment Deferment

Individuals receiving cancer treatment can seek Cancer Treatment Deferment. This deferment covers the period of active treatment and an additional six months following its conclusion. No fixed time limit applies, but a physician’s certification confirms treatment and duration; re-certification may be required annually.

Military Service Deferment

Military Service Deferment is for borrowers on active duty for war, military operation, or national emergency. This deferment can extend for 13 months following active duty service or until the borrower returns to school at least half-time. Proof of military service, like copies of military orders, establishes eligibility.

Parental Leave Deferment

Parental Leave Deferment is available for certain older Federal Family Education Loan (FFEL) Program loans. Eligibility requires being pregnant or caring for a newborn (under six months old) or newly adopted child, not working full-time or attending school, and prior half-time enrollment within six months of deferment. This deferment has a maximum duration of six months per occurrence and requires a certified statement with documentation like a birth certificate or physician’s statement.

Federal Loan Forbearance Options

Federal student loan forbearance allows borrowers to temporarily stop or reduce their payments. Forbearance is often easier to obtain for a broader range of financial difficulties. A key distinction is that interest typically accrues on all loan types during forbearance, including subsidized loans.

General Forbearance

General Forbearance can be requested for temporary financial difficulties, medical expenses, or changes in employment. This option is often discretionary, meaning the loan servicer has flexibility. Borrowers must provide a statement explaining financial hardship. General Forbearance is granted for up to 12 months at a time, with a cumulative limit of 60 months.

Mandatory Forbearance

Mandatory Forbearance must be granted if a borrower meets specific federal criteria. Situations include serving in a medical or dental internship/residency program, experiencing a high student loan debt burden, or performing national service. Documentation like proof of enrollment or national service certification demonstrates eligibility. This type of forbearance is not subject to servicer discretion.

Administrative Forbearance

Administrative Forbearance is typically applied by the loan servicer without a specific request, often in unique circumstances. Examples include periods during a declared natural disaster or national emergency, while transitioning between repayment plans, or during defaulted loan resolution. This forbearance temporarily suspends payments while administrative issues are addressed.

Applying for Postponement

To apply for deferment or forbearance, contact your federal loan servicer. The servicer manages your loan account and provides guidance.

Find servicer contact information and application forms on the Federal Student Aid website or your servicer’s site. Each postponement type has a specific form for required information; selecting the correct form avoids processing delays.

After completing the form, gather all supporting documentation proving eligibility. Documentation might include enrollment verification, unemployment benefit statements, income records, or medical certifications. Submit forms and documents via the servicer’s online portal, mail, or fax.

Upon submission, the loan servicer will review the application. Processing times vary; continue making regular payments until approval is confirmed. The servicer may request additional information. Once approved, the servicer will notify you of the postponement period and terms, including payment resumption date.

Understanding the Impact of Postponement

Postponing federal student loan payments through deferment or forbearance has important financial implications. While providing immediate relief, these options affect total cost and long-term repayment.

During deferment, interest typically does not accrue on subsidized Direct Loans and Federal Family Education Loan (FFEL) Program loans. However, interest continues to accrue on unsubsidized Direct Loans, Direct PLUS Loans, and all FFEL Program loans. For forbearance, interest generally accrues on all federal student loan types.

Unpaid interest accruing during postponement may be added to the principal balance, known as capitalization. This increases the total owed, leading to higher monthly payments and greater overall cost. While interest never capitalizes on Perkins Loans, it is a significant consideration for other federal loan types.

Postponement periods may also impact eligibility for loan forgiveness programs, such as Public Service Loan Forgiveness (PSLF) or Income-Driven Repayment (IDR). Generally, these periods do not count as qualifying payments towards PSLF, unless specific waivers or program changes apply. For IDR plans, payments are required to count towards forgiveness; postponement may extend the time needed to reach forgiveness.

Postponing payments extends the overall repayment period. However, when properly applied for and approved, deferment or forbearance does not negatively impact a borrower’s credit score, unlike missed payments. Be aware of the postponement period’s end and be prepared to resume payments to avoid delinquency.