Student Loan Deferment: Is It Right For You?

If you’re temporarily having trouble paying your student loan bills or are entirely unable to do so, choosing to defer your payments can make a lot of sense. It may be an option that’s available whether you have a federal student loan, a private student loan or both.

At the same time, seeking to defer your student loan is not a decision you should make lightly. And, depending on your situation, deferment may not be available to you—or there may be better choices. We’ll help you sort through the options.

What Is Student Loan Deferment?

Student loan deferment allows you to hit the “pause” button temporarily on your student loan payments. The actual amount of time varies; you can qualify for deferment as long as you’re still in school, for example, or for up to six months after you’ve finished a cancer treatment. There are rules about how deferment works for federal student loans, which makes it easy to know your options. But for private student loans, the lenders set the rules, so you’ll need to ask your lender which choices are available to you if you need help. Most of the advice we outline below refers to federal student loans, unless otherwise noted.

Deferment is similar to forbearance, another commonly-used option for people running into temporary financial problems. Federal loan deferment works differently on subsidized vs. unsubsidized federal loans. Interest will not accrue on subsidized federal student loans and federal Perkins loans as long as your loans are in deferment. This is handy because it can help keep your balance from growing too much while you’re taking a pause.

On the other hand, interest will continue to accrue on loans in forbearance and non-subsidized federal loans in deferment, which means you’ll have a bigger loan to pay off when you start making payments again. In other words: Interest will always accrue when your loans are in forbearance, but it might only accrue for some of your loans (subsidized loans, specifically) if your loans are in deferment.

Reasons to Seek Student Loan Deferment

Most student loans already start out in deferment. You typically don’t have to make payments on your loans while you’re still in school, during what’s known as the “in-school deferment” period. You’ll have to start repaying your loans again following a six-month grace period after you graduate, or drop down below half-time enrollment.

Once you’ve left school and your grace period is over, there are two main reasons you might want to seek out student loan deferment:

  • If you’ve hit a temporary rough patch with your finances, due to circumstances such as medical treatment or unemployment
  • If you’re on active-duty military service or serving with the Peace Corps

Reasons to Avoid Student Loan Deferment

There are two main reasons you might want to avoid student loan deferment:

  • It will take you longer to qualify for loan forgiveness, if you’re eligible
  • If you have unsubsidized loans, your loan balance will be larger when you come back to making payments because interest will continue to accrue during deferment

If you’re trying to get Public Service Loan Forgiveness, any deferment will extend the time it will take to qualify. This program relies on you making 120 on-time payments, so for every month you miss in making those payments, it’ll take you one month longer before you qualify to have your loans forgiven.

Types of Student Loan Deferment

There are eight types of deferment available for federal student loans. There aren’t any standards for private student loans, so you’ll need to contact your own lender directly to see what might be available to you.

Cancer Treatment Deferment

You’re fighting for your life when you have cancer, and you shouldn’t have to fight to make your student loan payments, too. If you’re currently being treated for cancer, you can defer your student loans while you’re in treatment and for a six-month period after the treatment is done.

Economic Hardship Deferment

“Economic hardship” could refer to a lot of things, but for the purposes of the U.S. Department of Education, hardship means you’re in one of these situations:

  • In the Peace Corps
  • Receiving means-tested welfare assistance, like Temporary Assistance for Needy Families (TANF)
  • Working full-time but are earning less than 150% of the poverty guideline based on the size of your family and the state you live in

If you qualify based on these requirements, you can apply for deferment in one-year increments for up to three years total over the life of your loan. Peace Corps volunteers can apply for deferment for the period that they’ll be serving. It’s also important to note that the definition of “economic hardship” is more all-encompassing for student loan forbearance, so you may have better luck with this program if you don’t fit the criteria above.

Graduate Fellowship Deferment

If you’ve been accepted into a graduate school that provides you with financial support (such as a research assistantship, a teaching assistantship, or a grant/fellowship) and you meet other criteria, you could be eligible to defer your loans until you graduate. This could be useful if you’re not eligible for in-school deferment.

In-School Deferment

As long as you’re still enrolled in school at least half-time, you won’t have to make any payments on your loans until you graduate or otherwise drop down below half-time status. After this happens, you’ll get a six-month grace period before you have to start making payments on your loans.

Military Service and Post-Active Duty Deferment

If you’re called up for active duty due to a war, national emergency or military operation, you could qualify to have your student loans placed in deferment while you’re engaged elsewhere. This deferment lasts until 180 days after the specific event, such as a deployment, has ended.

Once that specific event is over, you can also apply for a “post-active duty” deferment. It’ll tack on up to 13 months of further deferment, but will include the 180 days after your active duty event ends in the calculation. If you go back to school before that 13-month period is over, however, that type of deferment will end early and you can qualify for in-school deferment.

Parent PLUS Borrower Deferment

If you’re a parent who’s taken out a parent PLUS loan for your child, normally you’ll start making payments on it immediately.

But you do have the option of postponing those payments with this deferment option, which lasts for as long as your child is in school at least half-time. Once they drop below this amount, whether it’s because they’ve graduated or dropped out, you’ll get a further six-month grace period before you have to start repaying the loan.

PLUS loans work a little bit differently than other types of federal loans, in that interest does accrue on these loans while they’re in deferment.

Rehabilitation Training Deferment

If you’re going into rehab to deal with a drug addiction or mental health problem, making your student loan payments should be the last thing you have to worry about. In cases like this, you can request a deferment while you’re working to get back on your feet again with the help of a licensed facility.

Unemployment Deferment

It’s hard to make your student loan payments if you’re not earning any money. If you’re unemployed or are receiving unemployment benefits, you can apply for up to three full years’ worth of deferment until you find a job again.

How to Apply for Student Loan Deferment

Aside from in-school deferment, which should happen automatically, you’ll need to request a deferment for each of the other types. You can do this by contacting your student loan servicer to see if you’re eligible. If you are, you’ll need to fill out a form to request the deferment. You’ll probably also have to submit some proof in order to qualify. Here are the forms you might need:

  • Cancer Treatment Deferment Request
  • Economic Hardship Deferment Request
  • Graduate Fellowship Deferment Request
  • In-School Deferment Request (if your servicer doesn’t do this automatically)
  • Military Service and Post-Active Duty Student Deferment Request
  • Parent PLUS Borrower Deferment Request
  • Rehabilitation Training Deferment Request
  • Unemployment Deferment Request

Alternatives to Student Loan Deferment

There are two alternatives to student loan deferment: forbearance, and switching to an income-driven repayment plan.


Forbearance is essentially the same thing as student loan deferment except that interest continues to accrue while you’re taking a break from your loans—unless you choose to make interest-only payments, that is.

However, forbearance may be easier to qualify for in some cases. Deferments are generally limited to the circumstances mentioned above, but forbearance is more all-encompassing. It’s up to the loan servicer to make a decision about whether you qualify. You can get forbearance if you’re having trouble paying medical bills or if you’ve recently switched jobs, for example.

Income-Driven Repayment Plan

In most cases, the best option—if you’re able to afford it—is to switch to an income-driven repayment plan. This is especially true if you think it’ll be quite some time before you’re able to make your full student loan payments again, if ever.

Income-driven repayment plans include the following choices:

  • Revised Pay As You Earn (REPAYE)
  • Pay As You Earn (PAYE)
  • Income-Based Repayment (IBR)
  • Income-Contingent Repayment (ICR)

Each of these options calculates your new monthly payment in a slightly different way and has different requirements. In some cases, your student loan payment could be as low as $0, essentially making it the same thing as deferment or forbearance. You also can switch plans, so you’re not stuck forever with the first choice you make.

The real benefit, though, is that with some loans under the income-driven repayment plans, you could qualify for loan forgiveness after 20 or 25 years. This is true even if you never truly make a “payment” at all, if you continue to qualify for a $0 payment for the life of the loan. That’s why it’s usually considered the better option.

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