How to Defer Student Loans — And Whether You Should

Deferment is a temporary pause on student loan payments, often for up to three years if you qualify. Those qualifications are typically based on financial need — like if you’re unemployed or facing financial hardship — or face other circumstances.

Deferring student loan payments can be a welcome and necessary relief, but it’s not a great long-term solution. Here’s what to know before making the decision.

Should I defer my student loans?

Deferment can be expensive if you have private or unsubsidized federal student loans. Both of these loans accrue interest during deferment, and you’ll be responsible for paying it.

If you don’t pay the loan while the loan is in deferment, that unpaid interest will be capitalized — or added to your loan balance — when you enter repayment.

Those extra costs may be worth it if the alternative is having your wages garnished or losing your tax refunds because of a student loan default. But if you won’t be in good shape financially for a while, first look into an income-driven repayment plan. (More on that later.)

Even if you qualify for a deferment, you probably shouldn’t use it unless the following are true:

• You have subsidized federal loans or Perkins loans — these don’t accrue interest during deferment.

• You’re not pursuing forgiveness — periods of deferment may not count toward forgiveness requirements.

• You can’t afford to make any payment on your student loans.

• You'll be able to restart repayment relatively soon.

How to defer your student loans

To defer student loans, you must do the following:

1. Check your eligibility. You’ll need to meet specific eligibility criteria and still have deferment time available in your lifetime limit. You can defer federal student loans only for so long — in most cases, the maximum is three years total.

2. Apply. To apply, send your student loan servicer the appropriate application and any necessary documentation, like proof of unemployment benefits.

3. Keep making payments. Your student loan servicer must grant you a deferment if you qualify, but keep making payments until you're officially approved.

Types of student loan deferment

Here are the most common kinds of federal student loan deferment:

Many private lenders also let you defer student loans while you’re in school or the military. Contact your lender for eligibility details or to find out how to apply.

Deferment vs. income-driven repayment

Worried about affording your payments in the long run? Enrolling in income-driven repayment can offer the same immediate relief as student loan deferment, as well as additional long-term benefits.

You’ll likely still pay less each month. Many factors contribute to how income-driven payments are calculated. If you’re deferring loans because you don't earn much money, your income-driven payments could be as low as $0 — essentially the same amount as pausing payments altogether.

You can save on interest, too. A big benefit of deferment is not paying interest on subsidized loans. But most income-driven plans also waive those costs if your payments don’t cover accrued interest. This lasts for three years, the same length as unemployment and economic hardship deferments.

You’ll potentially earn loan forgiveness. After 20 or 25 years of payments, income-driven plans forgive any remaining balance on your loans. So instead of pausing payments for three years with a student loan deferment, you could pay under an income-driven plan and be that much closer to forgiveness.

You may pay more interest overall on income-driven repayment because these plans extend your repayment term. Use Federal Student Aid’s Loan Simulator to calculate the short- and long-term costs to see if an income-driven repayment plan makes more sense for you than a student loan deferment.