What deferment means and when you can use it

Deferment is a formal pause on your federal student loan payments. While in deferment, you stop making monthly payments, and in most cases the government pays the interest that accrues on subsidized loans. You must request deferment through your loan servicer — it does not happen automatically, and missing payments without an approved deferment will damage your credit.

Deferment is available only for federal loans, not private student loans. The most common reasons the government allows deferment are economic hardship, unemployment, return to school at least half-time, active military duty, and certain public service roles. Each reason has its own rules about how long you can defer and whether interest is covered.

Deferment is different from forbearance, which is a temporary pause where you still owe the accrued interest. Forbearance is easier to get but costs more in the long run because unpaid interest gets added to your loan balance. If you may have access to for deferment, it is usually the better choice.

Key Takeaways

  • You must contact your loan servicer and request deferment in writing — it will not be granted just because you stop paying.
  • On subsidized federal loans, the government covers interest during deferment; on unsubsidized loans, interest still accrues and gets added to your balance.
  • Deferment periods vary by reason: economic hardship typically allows up to three years, unemployment up to three years, and return to school for as long as you are enrolled at least half-time.
  • You can defer a federal loan only a limited number of times, and total deferment time is capped — usually three years for economic hardship combined across all reasons.
  • If you do not meet deferment criteria, forbearance is the next option, though it costs more because you pay interest on top of principal.

How to request deferment from your servicer

Start by identifying your loan servicer. You can find this on your monthly statement, or log into studentaid.gov and check your loan details. Common servicers include Fedloan Servicing, Navient, Great Lakes Higher Education Loan Services, and Mohela. Call or visit their website to request a deferment form.

The servicer will ask you to fill out a deferment request form and provide documentation that proves your reason. For economic hardship, you may need to show recent tax returns, pay stubs, or a written statement of your financial situation. For unemployment, you will need proof from your state unemployment office or a signed statement that you are actively seeking work. For return to school, you will need an enrollment verification from your school's registrar.

Submit the completed form and documents to your servicer by mail, fax, or online portal — check their website for the exact method. Keep copies of everything you send. The servicer will review your request and send you a written decision, usually within two to four weeks. If approved, your deferment period begins on the date your servicer receives the form, not the date you mailed it.

What happens to interest during deferment

On subsidized federal loans (typically undergraduate loans), the government pays the interest that accrues while you are in deferment. This means your loan balance does not grow, and when deferment ends, you owe exactly what you owed when it started. This is the main advantage of deferment over forbearance.

On unsubsidized federal loans (typically graduate and parent loans), interest accrues during deferment but is not paid by the government. You have two choices: pay the interest as it accrues, or let it accumulate and be added to your principal balance when deferment ends. If you do not pay it, the unpaid interest becomes part of your loan and you will pay interest on that interest later — a process called capitalization.

If you have a mix of subsidized and unsubsidized loans, your servicer will apply any payments you make during deferment to the unsubsidized loans first. Even during deferment, you can make voluntary payments toward the unsubsidized portion to avoid capitalization.

Deferment limits and how long you can defer

The length of deferment depends on your reason. Economic hardship deferment is usually granted for up to three years at a time, and you can request it multiple times, but your total economic hardship deferment across your entire loan history is capped at three years. Unemployment deferment is also up to three years per request. If you return to school at least half-time, you can defer for as long as you are enrolled, plus a six-month grace period after you graduate or drop below half-time enrollment.

Active military duty deferment is available for the length of your service plus 13 months after discharge. Public service deferment (such as Peace Corps or certain government positions) is available for the length of your service. Once you have used up your deferment time for a particular reason, you cannot use it again for that same reason.

If you run out of deferment time and still cannot pay, forbearance is your next option. Forbearance is easier to get but more expensive because interest accrues and is not paid by the government. Your servicer can tell you how much deferment time you have remaining.

The difference between deferment and forbearance

Both deferment and forbearance pause your payments, but they work differently. In deferment, the government covers interest on subsidized loans. In forbearance, you are responsible for all accrued interest, whether your loans are subsidized or not. This means forbearance costs more over time because unpaid interest gets capitalized and added to your balance.

Forbearance is easier to get. You do not have to prove hardship or unemployment — your servicer can grant forbearance for up to 12 months at a time, and you can request it multiple times. Deferment requires documentation and is limited by time and reason. If you do not meet deferment criteria, forbearance is the fallback.

If you are struggling with payments, ask your servicer about deferment first. If you do not may have access to, ask about forbearance. If you are on an income-driven repayment plan, you may also be able to lower your payment to $0 without pausing your loans — that option is worth exploring before either deferment or forbearance.

What happens when deferment ends

Your servicer will notify you in writing before your deferment period ends, usually 30 to 60 days in advance. On the date deferment ends, your regular monthly payment resumes. If you cannot resume payments, you must request a new deferment period or forbearance before your current deferment expires — do not wait until it ends and then miss a payment.

If you have unsubsidized loans and did not pay the accrued interest during deferment, that interest will be capitalized (added to your principal) when deferment ends. This increases the amount you owe and the interest you will pay over the life of the loan. Your servicer will send you a new loan statement showing your updated balance.

If your situation has not improved and you still cannot pay, contact your servicer immediately to request another deferment period or forbearance. Letting your loan go into default — missing payments for more than 270 days — will damage your credit score and can trigger wage garnishment or tax refund offset.

Deferment and your credit score

An approved deferment does not hurt your credit score. Your loan is considered in good standing while you are in an approved deferment period, and the pause does not show up as a missed payment. This is one reason deferment is preferable to simply stopping payments without requesting it.

However, if you miss payments while waiting for deferment approval, those missed payments will be reported to credit bureaus and will lower your score. This is why it is important to request deferment before you fall behind, or to contact your servicer as soon as you know you cannot pay. If you have already missed payments, ask your servicer whether they will backdate the deferment approval to cover those months.

Frequently Asked Questions

Can I defer my loans while I am in school?

Yes. If you are enrolled at least half-time in an accredited school, you can defer your federal loans for the length of your enrollment plus a six-month grace period after graduation or when you drop below half-time status. You will need to provide an enrollment verification from your school's registrar.

What if I have private student loans?

Deferment is not available for private student loans. Private lenders set their own rules. Some offer forbearance or temporary payment reductions, but you will need to contact your lender directly to ask what options are available. Federal deferment rules do not apply to private loans.

Will deferment affect my ability to get a mortgage or car loan?

An approved deferment should not hurt your credit, so it should not affect your ability to borrow. However, if you have missed payments before requesting deferment, those missed payments will show on your credit report and may affect lending decisions. Lenders look at your payment history, not just your current status.

Can I defer my loans more than once?

Yes, but there are limits. You can request deferment multiple times for the same reason, but your total deferment time for each reason is capped. Economic hardship deferment is limited to three years total across your entire loan history. Your servicer can tell you how much deferment time you have already used.

What should I do if my deferment request is denied?

Ask your servicer why it was denied and what documentation you are missing. If you still do not meet deferment criteria, ask about forbearance, which is easier to get. You can also ask about income-driven repayment plans, which may lower your payment to $0 without pausing your loans. If you disagree with the denial, you have the right to appeal.