What deferment means for your student loans

Deferment is a period during which you stop making monthly payments on your federal student loans, and the government does not count those months toward your repayment timeline. The loan balance itself does not shrink — you are pausing payments, not erasing debt. When deferment ends, you resume the same payment schedule you had before, picking up where you left off.

Deferment is different from forbearance, which also pauses payments but counts the months toward your repayment plan and may add interest to your balance. Deferment is generally the better option if you may have access to, because it does not extend your repayment period and may not accrue interest, depending on your loan type.

The federal government offers deferment for specific hardships and life circumstances. You cannot simply request it because you want a break from payments — you must fall into one of the categories the Department of Education recognizes.

Key Takeaways

  • Deferment pauses your monthly payments without extending your repayment timeline, and interest may not accrue depending on your loan type.
  • You must may have access to under specific categories: unemployment, economic hardship, school enrollment, military service, or a few others — you cannot defer for any reason.
  • Subsidized loans do not accrue interest during deferment; unsubsidized loans do, so the balance grows even though you are not paying.
  • You must request deferment through your loan servicer with documentation of your hardship or status, and approval typically takes two to four weeks.
  • Deferment periods are usually limited in length — most last six months to three years depending on the reason — and you must reapply if you need more time.

The main categories that may have access to for deferment

The Department of Education recognizes these grounds for deferment: you are enrolled at least half-time in school, you are unemployed or underemployed and registered with your state's job service, you are experiencing economic hardship (usually defined as income below 150 percent of the poverty line), you are serving on active duty in the military, you are in a graduate fellowship program, you are a medical or dental resident, or you are caring for a dependent with a serious health condition.

Unemployment deferment requires that you be registered with your state's unemployment office or job training program. Simply being out of work does not may have access to — the government needs proof that you are actively seeking employment through an official channel. Economic hardship deferment is the broadest category but has the strictest income threshold, and you will need recent tax returns or pay stubs to document it.

School enrollment deferment is straightforward: your school certifies that you are enrolled at least half-time, and your servicer handles the rest. Military deferment covers active duty service members and sometimes their spouses, depending on the loan type. If you do not fit one of these categories, deferment is not available to you, though forbearance may be.

How interest works during deferment

Whether interest accrues during deferment depends on your loan type. Subsidized federal loans — primarily Subsidized Stafford Loans — do not accrue interest while you are in deferment. The government covers the interest cost during that period. Unsubsidized federal loans and PLUS loans accrue interest even during deferment, meaning your balance grows each month even though you are not making payments.

If you have unsubsidized loans and enter deferment, you have a choice: you can pay the interest as it accrues, or you can let it capitalize (be added to the principal balance) when deferment ends. If you capitalize the interest, you will owe more when you resume payments, and future interest will be calculated on that larger balance. Paying interest during deferment, if you can afford it, keeps your total debt from growing.

Private student loans do not have deferment options through the federal government. If you have private loans, you must contact your lender directly to discuss payment pauses or hardship programs, which vary widely by lender.

How to request deferment from your loan servicer

Contact your federal loan servicer — the company that collects your payments, shown on your loan statements or at studentaid.gov. Tell them you want to request deferment and which category you fall under. They will send you a deferment request form, usually called a Deferment Request or Deferment Application, along with a list of documents you need to submit.

Required documents depend on your reason. Unemployment deferment requires proof of registration with your state job service. Economic hardship requires recent tax returns, pay stubs, or a statement of your household income. School enrollment requires your school to certify your enrollment status — your servicer can request this directly from your school's financial aid office. Military service requires a copy of your military orders or a letter from your commanding officer.

Submit the completed form and documents to your servicer by mail, email, or through their online portal. Processing usually takes two to four weeks. Your servicer will send you a letter confirming whether deferment was granted and the dates it covers. During that time, you do not make payments, and the months do not count toward your repayment plan.

How long deferment lasts and what happens when it ends

Deferment periods are not open-ended. Most deferment reasons allow six months to three years of deferment, depending on the category. School enrollment 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 status. Unemployment deferment typically lasts three years total in your lifetime. Economic hardship deferment usually covers six months at a time and can be renewed, but there are limits on how many times you can renew.

When your deferment period ends, your servicer will notify you and your payments will resume on the same schedule you had before deferment began. You do not start a new repayment plan — you pick up where you left off. If you still may have access to for deferment (for example, you are still unemployed), you can request another period before the current one expires.

If deferment ends and you cannot resume payments, forbearance is usually available as a backup. Forbearance also pauses payments but counts the months toward your repayment plan and accrues interest on all loan types, so it is a less favorable option but may be your only choice if you no longer may have access to for deferment.

Deferment versus forbearance: which is better

Both deferment and forbearance pause your payments, but they work differently. Deferment does not extend your repayment timeline — the months you are in deferment do not count toward your 10-year, 20-year, or 25-year repayment plan. Forbearance does count those months, so your repayment period gets longer. If you are on an income-driven repayment plan working toward Public Service Loan Forgiveness, this matters: deferment does not delay forgiveness, but forbearance does.

Interest accrual is the other major difference. Subsidized loans do not accrue interest during deferment but do during forbearance. Unsubsidized loans accrue interest in both, but the interest compounds differently depending on whether it capitalizes. If you have a choice between the two, deferment is almost always better — it costs you less in the long run and does not delay forgiveness programs.

However, deferment has strict may be able to access rules, and forbearance is available to almost anyone in financial hardship. If you do not may have access to for deferment, forbearance is your option to pause payments without defaulting on your loans.

What happens if you default instead of requesting deferment

If you stop paying without requesting deferment or forbearance, your loans go into default after 270 days of non-payment. Default damages your credit score, allows the government to garnish your wages, and can trigger collection efforts. You lose access to deferment and forbearance options once you are in default — your only path forward is to rehabilitate the loan by making nine on-time payments over ten months, which is a much harder road than requesting help before you miss a payment.

If you are struggling to pay, contact your servicer before you miss a payment. Deferment or forbearance is designed for exactly this situation. The application process takes a few weeks, so reach out as soon as you know you will have trouble making a payment.

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 request school enrollment deferment. Your school's financial aid office certifies your enrollment, and deferment lasts as long as you are enrolled plus a six-month grace period after you graduate or drop below half-time status.

Do I have to pay interest during deferment?

It depends on your loan type. Subsidized federal loans do not accrue interest during deferment — the government covers it. Unsubsidized loans and PLUS loans accrue interest, and you can choose to pay it as it accrues or let it capitalize when deferment ends. If you let it capitalize, your balance grows.

How many times can I use deferment?

There is no limit on how many times you can request deferment, but each reason has limits on how long a single deferment period lasts. Unemployment deferment, for example, is limited to three years total in your lifetime. If you still may have access to when one period ends, you can request another.

What if I do not may have access to for deferment?

If you do not fit one of the deferment categories, forbearance is usually available. Forbearance also pauses payments but counts the months toward your repayment plan and accrues interest on all loan types. Contact your servicer to discuss your options.

Does deferment affect Public Service Loan Forgiveness?

No. Deferment does not count toward your repayment plan, so it does not delay forgiveness. If you are working toward PSLF, deferment pauses your payments without pushing back your forgiveness date. Forbearance, by contrast, does count the months and can delay forgiveness.