Deferment lets you pause federal student loan payments for a set period without going into default, though interest still accrues on unsubsidized loans

Deferment is a formal pause on your federal student loan payments. During deferment, you do not have to make monthly payments, and your loan does not go into default — the lender recognizes the pause as legitimate. However, interest continues to build on unsubsidized loans, meaning you owe more when payments restart. On subsidized loans, the government covers the interest during deferment, so the balance does not grow.

Deferment is different from forbearance, which is another pause option. Forbearance also stops payments but is typically shorter and used when you do not meet the strict conditions for deferment. Both keep you out of default, but they work differently and have different consequences for how much you ultimately owe.

Key Takeaways

  • Deferment pauses your federal student loan payments without triggering default, but interest still accrues on unsubsidized loans.
  • You must meet specific conditions to receive deferment — common reasons include being in school, unemployment, or economic hardship.
  • On subsidized loans, the government pays the interest during deferment; on unsubsidized loans, you owe that interest when payments restart.
  • You must request deferment from your loan servicer and provide documentation of your reason; it does not happen automatically.

Types of deferment and who qualifies

Federal student loan deferment comes in several forms, each tied to a specific life circumstance. In-school deferment applies if you are enrolled at least half-time in an accredited school. Unemployment deferment is available if you are unemployed and registered with your state's unemployment office. Economic hardship deferment covers situations like receiving public assistance, serving in the Peace Corps, or experiencing a significant drop in income.

Other deferment types include those for military service, graduate fellowship study, and rehabilitation training. The conditions are narrow — you cannot simply ask for deferment because money is tight. Your servicer will ask for proof: a school enrollment letter, an unemployment benefits statement, or documentation of your hardship. If your situation does not fit one of these categories, forbearance may be your option instead.

How interest works during deferment

The interest question is the most important one, because it determines whether deferment actually saves you money or just delays the cost. Subsidized loans — typically Subsidized Stafford Loans — have interest paid by the Department of Education while you are in deferment. Your balance stays the same. When payments restart, you owe exactly what you owed when deferment began.

Unsubsidized loans — Unsubsidized Stafford Loans, PLUS loans, and most private loans — accrue interest during deferment. That interest is added to your balance. If you defer for one year and owe $20,000 on an unsubsidized loan at 5% interest, you will owe roughly $21,000 when deferment ends. You can choose to pay the accrued interest while in deferment to avoid this, but you are not required to.

How to request deferment from your servicer

Deferment does not happen automatically. You must contact your loan servicer — the company that collects your payments — and request it. Your servicer's name and contact information appear on your loan statements and at studentaid.gov. Most servicers let you request deferment online, by phone, or by mail.

When you request deferment, have your documentation ready. For in-school deferment, bring a letter from your school's registrar showing your enrollment status and expected graduation date. For unemployment deferment, bring a copy of your unemployment benefits statement or a letter from your state unemployment office. For economic hardship, bring pay stubs, tax returns, or letters showing your income or public assistance status. Your servicer will tell you exactly what they need before you submit.

Processing typically takes two to four weeks. During that time, continue making payments unless your servicer tells you to stop. Once deferment is approved, you will receive written confirmation stating the start date, end date, and whether interest will accrue.

How long deferment lasts

Deferment periods vary by type and are not indefinite. In-school deferment lasts as long as you are enrolled at least half-time, plus a six-month grace period after you graduate or drop below half-time enrollment. Unemployment deferment typically lasts three years total in your lifetime, though you can use it in separate periods. Economic hardship deferment usually lasts one year at a time, and you can request renewal if your hardship continues.

When deferment ends, your servicer will notify you in advance — usually 30 days before. At that point, your regular payment obligation resumes. If you cannot afford to pay, you can request forbearance, explore income-driven repayment plans, or request a new deferment period if you still meet the conditions.

Deferment versus forbearance: which one applies to you

Forbearance is similar to deferment but is used when you do not meet deferment conditions or have already used up your deferment time. During forbearance, you also pause payments and avoid default. The key difference: interest accrues on all loans during forbearance, even subsidized ones. Forbearance also typically lasts only three to six months, whereas deferment can last much longer.

If you meet the conditions for deferment, it is usually the better choice because subsidized loans do not accrue interest. If you do not meet deferment conditions but need a payment pause, forbearance is what remains available. Your servicer can tell you which option you may have access to for based on your situation.

What happens if deferment ends and you cannot pay

When deferment ends, you are expected to resume payments. If you cannot afford your regular payment amount, you have options before your loan goes into default. Income-driven repayment plans cap your payment at a percentage of your discretionary income — sometimes as low as $0 per month if your income is very low. You can switch to one of these plans at any time.

You can also request forbearance if you face a new hardship, or request a new deferment period if your circumstances still may have access to. The key is to contact your servicer before your payment is due, not after you miss it. Once a loan is 90 days past due, it is reported to credit bureaus. At 270 days past due, federal loans enter default and your servicer can begin collection action.

Frequently Asked Questions

Does deferment hurt my credit score?

No. Deferment is an approved pause, so it does not appear as a missed payment on your credit report. Your loan status will show as "deferred," which does not damage your credit. However, if you stop paying without requesting deferment, that will hurt your score.

Can I request deferment if I already missed a payment?

Yes, but the missed payment may already be reported to credit bureaus. Request deferment immediately to stop further damage. Your servicer can sometimes remove a single missed payment from your record if you bring the account current and enter deferment quickly.

What if I have private student loans — can I defer those?

Private loans do not have a formal deferment program like federal loans do. Your options depend on your lender's policies. Some private lenders offer forbearance or temporary payment reductions during hardship. Contact your private loan servicer directly to ask what options exist for your specific loan.

If I defer, will I owe more money at the end?

On subsidized loans, no — the government pays interest, so your balance stays the same. On unsubsidized loans, yes, unless you pay the accrued interest during deferment. The amount depends on your interest rate and how long deferment lasts.